News Article | April 27, 2017
General Mills has made impressive progress in introducing healthier products over the past year, reports Food Business News, but these improvements have yet to translate into higher sales. The company reported its seventh straight quarter of declining sales last month, but it hopes to turn that streak around with a promise to rethink as much as 60% of its business. Its strategy is to provide a response to a wide range of consumer trends, including revamping existing products to make them healthier, expanding its gluten-free range, moving to more organic ingredients and removing artificial colors and flavors. General Mills is a strong player in the cereal, yogurt and traditional snack aisles, but it has discovered over the past couple of years that it needs to branch out and innovate beyond these consumer staples. After Chobani ousted General Mills' Yoplait brand from the top spot in the yogurt category last year, company executives conceded that they needed to make some big changes to align with current consumer trends. For a food giant like General Mills, the speed at which it has made these changes has been striking. However, it's arguably not fast enough, as smaller companies are claiming a larger portion of supermarket shelf space than ever before. The company claims that 79% of its U.S. sales volume has been nutritionally improved since 2005. In the past year, it has increased whole grains in its cereals, increased the number of gluten-free products to more than 1,000 — up from 850 in 2014 — and revised its supply chain to ensure long-term availability of organic ingredients. In 2015, it also launched a venture capital arm, 301 INC., to invest in promising food start-ups and diversify its portfolio. So far, this has proved to be a slow-burner in terms of return on investment. Diversification makes sense, as declining yogurt sales were a big factor in the company’s decision to lower its sales and earnings targets in February — targets that were reaffirmed last month. It also needs to revise its pricing. CEO Ken Powell told investors in a conference call that some of its products were not priced competitively enough and that more discounts were needed than it had anticipated.
News Article | April 28, 2017
CPG sales are starting 2017 on something of a slow note, as some of the biggest companies have reported decreasing sales so far this year. While some may point to the White House and economic uncertainty as the cause of these low numbers, others believe this sales dip has more to do with a changing consumer mindset. Today's consumer demands healthy, fresh food — a category for which CPG companies have not traditionally been known. Because of this, many major food companies are reformulating their mainstay products to contain less sugar, salt and preservatives, as well as creating entirely new health-focused items. Still, these initiatives are easier said then done for major manufacturers. Many analysts say that big brands like Yoplait are losing ground to smaller upstarts because they are better positioned to adapt to changing consumer sentiment. This flexibility is hard for legacy companies to attain, which is one of the reasons why big companies are investing in better-for-you-brands. Major manufacturers don't always publicize their reformulation efforts. Remembering the nightmare of Coca-Cola's well publicized and ultimately disastrous 1980s revamping of its core formula, they want to make sure not to alienate their core customers who might fear different tastes or appearances. If a manufacturer tells consumers about a reformulation, sometimes it happens months after the new product has been on the shelves — like Kraft Heinz announcing last year that it had already switched to all natural ingredients in its iconic macaroni and cheese. While these stealth reformulation efforts make sense from a brand defense standpoint, they might not be the best idea for today's health-conscious consumer. If consumers have no reason to think that a large manufacturer's CPG product has had a nutrition upgrade, they may instead buy a new "healthier" product from a small upstart, which could actually have a similar nutrition profile.
News Article | May 4, 2017
Food manufacturer General Mills named Jeff Harmening as its new CEO starting June 1, the company said in a statement. He takes over for Ken Powell, who has been CEO and chairman since 2007. Currently the chief operating officer, Harmening has been with the food maker for 23 years. He was widely seen as the logical successor to Powell when he announced his retirement. General Mills also said Harmening was elected to the company's board of directors. "General Mills has a long tradition of delivering top-tier returns that our shareholders have counted on for generations," Powell said. "We are focused on growth and feel strongly that Jeff is the right leader for the next leg of our journey." The change in leadership at the Minnesota-based food company, which makes Cheerios, Annie's, Yoplait and Nature Valley, comes as it faces seven straight quarters of declining sales. The manufacturer's woes are no different than those affecting other food and beverage giants as consumers seek healthier and fresher alternatives and shift away from packaged products such as cereal. Established food giants also face the challenge of trendy upstart companies that are able to more quickly introduce new products in line with public tastes and beliefs. For General Mills, the biggest impact has been in yogurt — about 13% of its sales — where Chobani has overtaken the company's Yoplait, the segment's long-established leader, to become the largest U.S. brand in the segment last year. General Mills has committed to overhauling 60% of its yogurt business through Greek varieties, flavors and other options, but so far those efforts have yet to resonate with consumers. Harmening will need to focus his efforts at improving the company's yogurt and cereal operations, while accelerating efforts to introduce new or reformulated products and boost growth. The 151-year old company has removed artificial flavors and colors from some of its cereals — a decision popular with consumers, but that has not been enough to revive U.S. retail sales of cereal, which fell 3% during its most recent quarter. The company also has focused on removing gluten from its products because so many consumers are avoiding it. When Harmening takes the helm next month, he may have not have much to learn given his experience with General Mills. His time with the company and in the food industry as a whole should be extremely beneficial — and he may well come into the job with a clear roadmap for where he wants to take the company. At first glance, however, Wall Street appeared unimpressed with the appointment: General Mills' stock hit a 52-week low on Wednesday. It will be particularly interesting to see where Harmening stands on M&A strategy and whether he pursues mergers agressively — like General Mills did in buying Annie's, which boasts lines of mac and cheese, cereal and yogurt, for $820 million three years ago. Harmening could look to a mega-deal to boost growth, or even find himself on the receiving end of an offer from another company. Earlier this year, Kraft Heinz proposed to buy Unilever for $143 billion this February but the deal was quickly scuttled over price. Analysts have speculated that it's only a matter of time before bigger-name players in the food and beverage look to consolidate.
Yoplait and Chr. Hansen A S | Date: 2010-12-08
The present invention relates to a process for manufacturing fermented dairy products, in particular stirred milk products. The invention concerns a process for the manufacture of a fermented dairy product without any cooling step for stopping fermentation due to the use of a weakly post-acidifying lactic bacterium culture as a starter.
Yoplait | Date: 2013-03-28
The present invention relates to the preparation of food compositions capable of improving the bone status of the consumer by promoting bone tissue formation. In particular, it relates to the use of milk protein proteolysates for the preparation of these compositions.
Chr. Hansen A S and Yoplait | Date: 2010-06-03
The present invention relates to a process for manufacturing fermented dairy products, in particular stirred milk products. The invention concerns a process for the manufacture of a fermented dairy product without any cooling step for stopping fermentation due to the use of a weakly post-acidifying lactic bacterium culture as a starter.
News Article | February 26, 2015
John Bryant is a voracious cereal eater. Most mornings, he has a bowl of Kellogg’s All-Bran Buds, a spinoff of the company’s 99-year-old All-Bran, originally marketed as a “natural laxative.” At night he’s likely to snack on Honey Smacks, which is 56 percent sugar by weight. Sometimes he’ll mix it with more nutritious Frosted Mini-Wheats. Bryant also feeds the stuff to his six children. “I can assure you that we go through an enormous amount of cereal,” he says. This makes the Bryant household somewhat of an anachronism at a time when Americans have moved on to granola bars, rediscovered the virtues of hot meals such as oatmeal and eggs, and fallen under the spell of Greek yogurt. But then Bryant would probably feel guilty if he joined them. He’s chief executive officer of Kellogg, the world’s largest cereal maker, whose brands also include Frosted Flakes, Rice Krispies, Corn Flakes, Froot Loops, and Apple Jacks. Kellogg needs all the cereal eaters it can muster. On Feb. 12, Bryant, fortified by his customary helping of All-Bran, arrived at Kellogg headquarters in Battle Creek, Mich., to deliver bad news. He announced the company’s U.S. morning-foods net sales fell 8 percent in the fourth quarter of 2014. It was the division’s seventh quarterly decline in a row. “It’s very frustrating,” Bryant said in a postmortem telephone interview. For almost a century, Kellogg defined the American breakfast: a moment when people would be jolted out of their drowsiness—often with a stupendous serving of sugar. Breakfast was personified by Kellogg’s cartoon mascots like Frosted Flakes’ vigorous Tony the Tiger; Froot Loops’ pig Latin–spouting Toucan Sam; and Rice Krispies’ Snap, Crackle, and Pop, a trio of elves who mischievously splashed around in a milky bowl. Kellogg still spends more than $1 billion a year on advertising, but it no longer has the same hold on breakfast. The sales of 19 of Kellogg’s top 25 cereals eroded last year, according to Consumer Edge Research, a Stamford (Conn.) firm that tracks the food industry. Sales of Frosted Flakes, the company’s No. 1 brand, fell 4.5 percent. Frosted Mini-Wheats declined by 5 percent. Meanwhile, Special K Red Berries, one of the company’s breakout successes in the past decade, fell by 14 percent. Kellogg executives don’t expect cereal sales to return to growth this year, though they hope to slow the rate of decline and do better in 2016. But some Wall Street analysts say cereal sales may never fully recover. In Battle Creek, so-called Cereal City, that would be the equivalent of the apocalypse. The 49-year-old Bryant, who resembles a cereal box character himself with his wide eyes, toothy smile, and elongated chin, blames Kellogg’s financial woes on the changing tastes of fickle breakfast eaters. The company flourished in the Baby Boom era, when fathers went off to work and mothers stayed behind to tend to three or four children. For these women, cereal must have been heaven-sent. They could pour everybody a bowl of Corn Flakes, leave a milk carton out, and be done with breakfast, except for the dishes. Now Americans have fewer children. Both parents often work and no longer have time to linger over a serving of Apple Jacks and the local newspaper. Many people grab something on the way to work and devour it in their cars or at their desks while checking e-mail. “For a while, breakfast cereal was convenience food,” says Abigail Carroll, author of Three Squares: The Invention of the American Meal. “But convenience is relative. It’s more convenient to grab a breakfast bar, yogurt, a piece of fruit, or a breakfast sandwich at some fast-food place than to eat a bowl of breakfast cereal.” People who still eat breakfast at home favor more labor-intensive breakfasts, according to a recent Nielsen survey. They spend more time at the stove, preparing oatmeal (sales were up 3.5 percent in the first half of 2014) and eggs (up 7 percent last year). They’re putting their toasters to work, heating up frozen waffles, French toast, and pancakes (sales of these foods were up 4.5 percent in the last five years). This last inclination should be helping Kellogg: It owns Eggo frozen waffles. But Eggo sales weren’t enough to offset its slumping U.S. cereal numbers. “There has just been a massive fragmentation of the breakfast occasion,” says Julian Mellentin, director of food analysis at research firm New Nutrition Business. And Kellogg faces a more ominous trend at the table. As Americans become more health-conscious, they’re shying away from the kind of processed food baked in Kellogg’s four U.S. cereal factories. They tend to be averse to carbohydrates, which is a problem for a company selling cereal derived from corn, oats, and rice. “They basically have a carb-heavy portfolio,” says Robert Dickerson, senior packaged-food analyst at Consumer Edge. If such discerning shoppers still eat cereal, they prefer the gluten-free kind, sales of which are up 22 percent, according to Nielsen. There’s also growing suspicion of packaged-food companies that fill their products with genetically modified organisms (GMOs). For these breakfast eaters, Tony the Tiger and Toucan Sam may seem less like friendly childhood avatars and more like malevolent sugar traffickers. Bryant says Kellogg is laboring to develop cereals that will overcome these cultural shifts and end its morning misery. Some of Kellogg’s wounds, however, are self-inflicted. Its two largest competitors—General Mills, maker of Cheerios and Lucky Charms, and Post Holdings, whose brands include Grape-Nuts and Honey Bunches of Oats—are struggling with the same morning trends. Yet the decline in General Mills’ 2014 cereal sales was half as bad as Kellogg’s, and Post eked out a 2 percent increase. Kellogg’s dismal sales are indicative of the company’s larger problems. Of the 21 analysts covering Kellogg tracked by Bloomberg, 19 have a sell or a hold rating on the company’s stock. Only two recommend buying the cereal maker’s shares. It’s cut costs, only to amp up spending again. There have been three heads of U.S. breakfast foods in four years as the division’s profits fell. Bryant’s latest scheme to revive cereal sales—by adding more fruit and natural ingredients to some of its best-known brands—seems far-fetched at best. The meltdown in Battle Creek is puzzling because, until recently, the company was known as a well-managed organization. “Kellogg was perhaps the most respected consumer-product company out there,” says David Palmer, a food industry analyst at RBC Capital Markets. “They went off the rails.” Bryant frequently pays homage to his company’s founder, Will K. Kellogg, the man who practically invented the modern idea of breakfast. Throughout much of the 19th century, Americans woke up in the morning and ate leftovers. Predictably, this caused widespread indigestion. Wealthy people often went to sanitariums for exotic cures involving enemas and hydrotherapy. Kellogg worked at just such a health spa in Battle Creek run by his older brother, Dr. John Harvey Kellogg, an eccentric wellness guru memorialized in the 1994 movie The Road to Wellville. The Kelloggs were Seventh-Day Adventists and therefore strict vegetarians. They couldn’t serve their patients eggs and bacon. So in 1894 they came up with something lighter: corn flakes. “They developed a flaking process,” says Brian Wilson, a professor of comparative religion at Western Michigan University and author of Dr. John Harvey Kellogg and the Religion of Biologic Living. “That’s the origin of the modern breakfast flake.” The Kellogg brothers were soon quarreling about what to do with the invention. W.K. Kellogg wanted to make money. In 1906 he founded Battle Creek Toasted Corn Flake Co., enlivening the taste of his cereal with sugar. His brother thought this was blasphemous. A legal battle ensued over who had the right to use the family name, and W.K. Kellogg prevailed. He introduced All-Bran in 1916. Rice Krispies followed in 1928. By then, Kellogg was a wealthy man known for his benevolence. He started a charitable foundation that supported children’s health and education. During the Depression, he changed the factories’ three eight-hour shifts to four six-hour ones to employ more people. In 1949, Kellogg hired Leo Burnett, the rumpled advertising genius who created the Jolly Green Giant and the Marlboro Man. Burnett persuaded Kellogg to promote his cereals on television, then a nascent medium. His agency was responsible for many of Kellogg’s Disney-like cartoon characters. They became as famous as the ones in the Saturday morning shows sponsored by Kellogg, such as Yogi Bear and Huckleberry Hound. In fact, Yogi and Huckleberry sometimes cavorted in Kellogg commercials. Children, many of whom watched TV with a bowl of milk-soaked Kellogg’s Sugar Pops or Frosted Flakes, were entranced. They ate cereal for breakfast, cereal for lunch, and cereal for a bedtime snack. Will Kellogg’s Cereal Sales Ever Return to Normal? Kellogg died at the age of 91 in 1951. By the 1970s, Kellogg’s share of the U.S. cereal market had reached 45 percent. The Federal Trade Commission said the company was too big and might need to be broken up. Nothing came of it. It was harder, though, for Kellogg to escape the consumer activists who criticized marketing junk food to youngsters. “Many of the kid-oriented cereals have a fair amount of sugar in them,” says Michael Jacobson, executive director of the Center for Science in the Public Interest, a food industry watchdog. “Their Eggo waffles are mostly white flour. Pop-Tarts are white flour and sugar. For a company that started out as a health-food company, they’ve turned into something very different.” (Kellogg says it has lowered the amount of sugar in its top-selling kids’ cereal by as much as 30 percent in the past several years.) As sugary cereals started to lose their broad appeal by the early 1990s, Kellogg forfeited its dominant position in the U.S. to General Mills, whose Cheerios were marketed as a healthier alternative. Kellogg’s fortunes rose again with the ascension of Carlos Gutierrez, a handsome Cuban-born executive with dark hair and a snowy mustache who began his career selling Frosted Flakes out of a truck to hole-in-the-wall stores in Mexico City. Gutierrez took over as the company’s CEO in 1999 and proved himself a gifted morning-food strategist. He believed that consumers would pay more for cereals they thought were better for them. He decided to push Special K, then a staid diet brand marketed to weight-conscious women. Kellogg spiced it up by introducing freeze-dried strawberries developed in the company’s Battle Creek food laboratory. Special K Red Berries became a best-seller, inspiring a plethora of extensions such as Special K Chocolatey Delight cereal, Special K Cracker Chips, and a Special K low-calorie pink lemonade mix. Kellogg also paid $33 million in 2000 for Kashi, a health-food cereal maker founded by an enterprising jazz trumpeter and his wife in La Jolla, Calif. At the time, Kashi was bringing in $25 million a year. Less than a decade later, its annual revenue had climbed to $600 million. Gutierrez made a point of keeping Kashi based in Southern California to give it some indie cred. But now that it was a division of Kellogg, the health-food purveyor no longer behaved like a mom and pop venture. It introduced Kashi Chocolate Almond Butter cookies, Kashi frozen pizzas, and other items that seemed closer and closer to processed food. In 2004, Gutierrez departed to become President George W. Bush’s Commerce secretary. After a two-year stint by James Jenness, a Kellogg director and former Leo Burnett executive, David Mackay, a balding, soft-spoken New Zealander and the company’s chief operating officer, took the top job. Kellogg’s current problems began shortly thereafter. In 2008, Mackay embarked on a $1 billion, three-year cost-cutting initiative called K-Lean, which targeted wasteful spending in the company’s factories. It was soon clear that Mackay had gone overboard. A flood at an Eggo factory in Atlanta led to a debilitating frozen waffle shortage that battered the company’s financial results in 2009. The following year, Kellogg recalled 28 million boxes of Froot Loops, Honey Smacks, and others manufactured at its Omaha plant because of an odd stench and taste the company traced to the plastic lining in the boxes. Kellogg acknowledged that some customers started their day with these cereals only to be sidelined by nausea and diarrhea. “It was horrible,” says Trevor Bidelman, president of Local 3G of the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union, which represents workers at the Battle Creek cereal factory. “They cut way too deep. Probably the biggest thing that hurt them was the thousands of years of experience that they ran out the door. Our plants could not run very effectively for two to three years after that.” (Kellogg says neither the flood nor the recall were related to K-Lean.) By the end of 2010, Kellogg had replaced Mackay with the more gregarious Bryant, a 13-year Kellogg veteran. His first task was to clean up the K-Lean mess. “We did cut too many people in our facilities in the U.S. network,” Bryant admitted in a conference call in November 2011. He said Kellogg was hiring 300 factory workers and adding additional waffle capacity. Some analysts listening were astonished by the disarray in Battle Creek. “It seems like the more rocks that are turned over, there is more ugly stuff underneath,” Eric Katzman, a food industry analyst at Deutsche Bank, said at the time. “It’s amazing that a company like Kellogg, with its reputation, is actually going through this.” As Kellogg flailed, General Mills strengthened its position. That year, when many Americans were choosing yogurt over Cheerios, it paid $1.1 billion for a controlling stake in Yoplait, the world’s second-largest yogurt producer. As soon as he could, Bryant made what he considered a transformative purchase. In 2012 he orchestrated Kellogg’s $2.7 billion acquisition of Pringles, the 44-year-old canned potato chip brand, from Procter & Gamble. It’s hard to imagine a product more emblematic of the processed food that American consumers were shirking. But the deal boosted Kellogg’s net sales by more than $1 billion that year, to $14 billion, and enabled Bryant to claim that Kellogg was no longer so dependent on cereal. Kellogg still counted on Frosted Flakes and its breakfast-food siblings for more than a third of its operating profits, which were dwindling. In November 2013, Bryant puzzled Wall Street by announcing a four-year cost-cutting plan with another memorable title: Project K. He vowed to eliminate 7 percent of Kellogg’s workforce and use a portion of the savings to create exciting new cereals, though he declined to provide further details at the time. Industry analysts were skeptical. “If you say you cut too much a year ago, and it didn’t lead to improved performance, then why should we believe that cutting more now will solve the longer-term issue, which is reduced demand?” Consumer Edge’s Dickerson says. In 2014, Kellogg closed a cereal plant in London, Ont., and an Australian snacks operation. Bryant has threatened to close one of its four American cereal plants this year if the bakers union won’t accept a contract enabling Kellogg to hire a new category of “transitional” workers who would be paid lower wages and be ineligible for a pension. “It is not our preferred approach,” Bryant says. “But if that’s where we end up, that’s a path we’ll have to go down.” So far the union has declined his overtures. Bidelman, a fourth-generation Kellogg employee, doesn’t think the company’s founder would have treated his factory workers so callously. “The philosophy of the company seems to have changed quite a bit,” he says. Instead, Bidelman says, Kellogg should trim Bryant’s compensation, which was $7.9 million in 2013. Morning-food sales continued to fall in 2014. Some Special K spinoffs posted double-digit declines, and the Kashi line was a particular embarrassment. Kashi Heart to Heart fell 27 percent. Kashi GoLean Crunch lost 30 percent. Analysts say that part of the problem is Kellogg’s indecisiveness with the division. In 2013 it moved Kashi from Southern California to Battle Creek, which Kellogg insisted would better position it for future growth. Then, last year, Bryant announced that Kellogg was moving Kashi back to La Jolla so the struggling unit would be closer to its roots. “Kashi is a brand that has lost its way,” says RBC’s Palmer. “Many of its varieties are not organic. Many have GMOs.” While Bryant attacked costs, his competitors added new cereals in response to consumers’ shifting breakfast habits. In January 2014, General Mills announced GMO-free Cheerios. Post said it would release a similar version of Grape-Nuts. Kellogg says it can’t do the same with Frosted Flakes because almost all the corn made in the U.S. is genetically modified. In November, Bryant made a belated attempt to get some new breakfast fare to market, unveiling a gluten-free Special K in an earnings call. He arguably went off message, however, by making a big deal out of a new peanut butter and jelly Pop-Tart. “If I ask you do you think peanut butter and jelly Pop-Tarts are where United States food culture is headed, the answer most likely is no,” Dickerson says. In February, Bryant acknowledged that Kellogg’s U.S. snacks division was also ailing. Last year its sales declined 2 percent. This put even more pressure on him to resuscitate the cereal division, so Bryant has been pushing what he describes as a long-term rescue plan. He wants to rebrand Special K from a diet brand to a cereal for the health-conscious with new variants such as Special K Protein Cinnamon Brown Sugar Crunch. The company is also promoting Raisin Bran with Cranberries. Bob Goldin, executive vice president of Technomic, a food industry consultant, doubts that these new cereals will have a big impact on the company’s sales. “The category is pretty mature,” Goldin says. “It’s not so easy anymore to introduce a new line or do a new TV ad and life is good again.” Bryant is also determined to restore Kashi’s credibility with health-food shoppers. Kellogg already has 15 GMO-free cereals in supermarkets. It hopes to add more this year. At the same time, Kellogg’s less publicized political maneuvers aren’t helping it with anti-GMO consumers. In California, Washington, and Oregon, Kellogg is spending $1.4 million to defeat ballot initiatives that would force companies to identify GMO ingredients on their labels. Alexis Baden-Mayer, political director of the Organic Consumers Association, says Kellogg is alienating customers: “It seems counterintuitive.” Kellogg says state-by-state labeling would confuse shoppers and increase costs. Focusing on Special K and Kashi comes with the risk of neglecting older brands—the ones keeping Kellogg afloat. Even though Frosted Flakes is hardly a next-generation breakfast product, the company sold $439 million worth last year, making it the second-most popular cereal in the U.S. after General Mills’ Honey Nut Cheerios. What’s more, Kellogg increased Froot Loops sales by 3 percent, to $266 million, by marketing the technicolor rings to adults as a late-night snack. “These are not dead brands,” says Mary Zalla, global vice president of Landor Associates, a branding adviser. “There’s amazing equity in Kellogg’s name. Then they’ve got this other whole layer of value: the characters. Sometimes they have longevity. Sometimes they don’t. But think of Ronald McDonald.” Bryant isn’t worried. “The company has been around for 109 years,” he says. “We have the time. We have a plan to turn it around.” He better show results in a hurry. The consensus on Wall Street is that Kellogg is a takeover candidate. “He’s at a critical point in his career,” says Palmer of Bryant. Perhaps it’s time for the CEO to imagine what W.K. Kellogg would do. It’s doubtful the company’s founder would let things get so out of control at his factories. It’s hard to think of him taking away employee benefits. He wasn’t a trend follower: Kellogg created breakfast flakes and foresaw the power of TV advertising. There must be some way for his successors to sell breakfast food to working parents and their children who are now watching YouTube instead of Saturday morning cartoons. Bryant could always triple his All-Bran Buds consumption and entice his children to eat more cereal, too. It may not save Kellogg. But at least he’ll be able to say he went down fighting.
News Article | April 29, 2016
In 2005, Koel Thomae was visiting her mother in the Australian seaside town of Noosa when she had a life-altering experience. It involved a cup of yogurt. People often wax hyperbolic about amazing food experiences, but this yogurt literally transformed Thomae's life: It led her to quit her job, befriend a dairy farmer, use her retirement savings to build a yogurt production plant, and launch her own yogurt company, appropriately named Noosa. She came across the stuff, made in small batches by a local family, at a corner store by the beach. She remembers the moment she first tasted it the way some people remember meeting their soulmate. "It came in a clear tub and was topped off with passionfruit puree, a quintessentially Aussie flavor," she recalls. "It was one of the best things I had ever tasted in my life." The yogurt was much creamier than traditional blended yogurt. It was made with whole milk, which made it much richer than the fat-free or low-fat yogurts that are common in the refrigerated section of grocery stores. And unlike Greek yogurt, which is strained to the point of being firm, this yogurt was still light and fluffy, like thick whipped cream. In terms of flavor, it wasn't too tart and just a tad sweet, since it was infused with honey, making it the perfect complement to fruit. Some naysayers discouraged her, saying it would be impossible to compete in the cutthroat $7.7 billion yogurt market, which is crowded with massive brands like Chobani, Yoplait, and Dannon. Instead, she decided to risk everything for a product that she thought was so delicious, everyone would want to eat it. "If we had done any market research, it would have shut us down," Thomae says. And her bet has paid off: She's created one of the fastest-growing yogurt companies in America, bringing in $100 million in revenues a year. While the brand is still small by comparison—Chobani, the biggest owner-operated yogurt brand in the industry with 18% market share, brings in $1.2 billion annually—Noosa is on a tear. With recently secured contracts at big national retailers like Target, its revenue growth will accelerate in the coming year. And Noosa is already the top-selling yogurt brand in Colorado, outpacing the giants of the industry. Before launching Noosa, Thomae had spent several years working as a supply chain manager at the soda startup Izze in Boulder, Colorado, where she had been living as an expat since college. She had some experience in the food business. How hard could it be to manufacture yogurt? Very hard, it turned out. As she learned more about the industry, she discovered that dairy products are highly regulated in the U.S., and the logistics of getting enough fresh milk to produce a batch of yogurt can be mind-boggling (as well as controversial). It takes three cups of milk to produce one cup of yogurt; you need to have access to a large supply of milk that can be quickly and regularly delivered to your production facility. The key, she thought, was connecting with someone who had experience in the dairy industry. After she licensed the original recipe from the Australian family, she cold-called a dairy farm close to where she lived in Colorado to ask if they might be interested in helping her make some yogurt. "I thought she was just a little crazy," says Rob Graves, who invited her out to his farm in 2008. "But then I tasted the yogurt." Like Thomae, Graves thought the yogurt was pretty spectacular. He had never set out to be a yogurt entrepreneur, but he was intrigued by the prospect of using his cow's milk to create this creamy, delicious stuff. And he immediately understood that the way to achieve this was to make sure that they used milk of the highest quality. As a fourth-generation dairy farmer, Graves knows everything there is to know about milk. His family has owned his 800-acre farm since 1874, and he currently owns 850 cows. He's the kind of man who gets excited about the latest cow-milking technology, like a rotary he's just bought that ensures each cow gets milked for exactly seven and a half minutes. "Cows like consistency," he explains. He regularly drinks raw, unpasteurized milk from his cows, since he believes it is the best way for him to determine how happy the herd is. Changes in temperature or wind can impact the flavor of the milk, he says. Too much starch in the feed can turn the milk acidic. Graves was excited about this new challenge, so he decided to become Thomae's business partner. Together, they wagered that there was room in the U.S. market for a different kind of yogurt. There were many challenges before them. For instance, the startup costs for a food product are incredibly high. "There are a lot of costs, not just in terms of the supply chain, but also in getting products on shelves. When Yoplait has a new product, they have an enormous marketing budget so that it becomes a national player; we never had that." Instead of tinkering with small batches in a commercial kitchen, the duo used their own money to build a yogurt production facility on the Graves family farm. This would give Noosa an advantage over many other yogurt companies by allowing it to control its supply chain, down to each individual cow. "We never even put the milk on a truck," Graves says. "It's just a pipeline." By 2010, the plant was up and running. Noosa started making 200 gallons of yogurt a week, which was a lot, given that it did not have any customers. Thomae and Graves also developed a passionfruit purée, much like the one Thomae had tried at the beach in Noosa, and began to concoct many other flavors. Graves had been selling old-fashioned bottles of milk through a home delivery service and at local groceries, including the Colorado Whole Foods stores, so he tapped into these networks to start selling Noosa. The two also made the rounds to the local farmer's markets. This slow, deliberate process began to pay off. Interest in the product spread by word of mouth, and soon people began asking their local retailers to carry Noosa on their shelves. "But we were interested in making the leap from the natural food world to conventional grocery stores," Thomae says. "We wanted to play alongside all of the big boys, the Dannons and the Yoplaits." Their big break came when they heard, through the grapevine, that the national dairy company Horizon Organic was no longer going to produce six-ounce yogurt cups. The buyer at a local grocery chain called King Sooper needed new products to stock at his 100 stores. Noosa contacted him; his only caveat was that they would need to be able to produce a lot of yogurt very quickly. But Graves and Thomae had been preparing for this moment from the beginning, by investing early in the infrastructure. They would have no problem ramping up production in a snap. "This was a really important case study that we showed buyers as we moved beyond Colorado," Thomae says. Over the past six years, Noosa has been growing fast, but the real tipping point came when the brand started showing up in mainstream supermarkets. Over the last two years alone, sales have doubled. From the start, Thomae and Graves realized that the key to taking off in the food industry is being able to scale quickly and produce products as soon as buyers need them. Having access to their own cows and controlling their own production facility has been crucial to their success. Noosa now produces 18 different flavors. Staying true to their original approach, they don't do consumer research, but pick flavors that taste delicious to them. Many are inspired by fruit found in Australia, such as coconut, pineapple, and mango, but there are also American favorites like pumpkin and strawberry rhubarb. As Noosa grows, it wants to make sure that the yogurt remains as memorable as the first bite that Thomae took in Australia. "What we're most proud of is that we've always remained very focused on what has made us successful to begin with, which is making bloody good yogurt," she says.
News Article | December 5, 2016
Transparency Market Research observes that the leading players in the North America Yogurt Market held a share of 74.3% in market in 2016. This mammoth share indicates that the market is highly consolidated with the presence of few strong players. Chobani, Danone, Private Label, Yoplait, and Fage are the top five players. Their dominance can be credited to a diverse and a comprehensive range of products. The persistent efforts to add more number of flavors and deliver them through innovative packaging and marketing methods is estimated to be the primary focus on these companies in the coming years. Additionally, these companies are also likely to collaborate with dairy owners in emerging markets for strategic reasons. Geographical expansion is estimated to fare well with the North America yogurt market in the near future. According to the research report, the opportunity in the North America yogurt market is expected to be worth US$14.59 bn by 2024 as compared to US$11.18 bn in 2015. During the forecast years of 2016 and 2024, the overall market is expected to surge at a CAGR of 3.0%. U.S. to Dominate North America Yogurt Market with 3.7% CAGR 2016–2024 The demand for traditional yogurt is projected to exhibit continued growth during the forecast period. By the end of 2024, the traditional yogurt segment is estimated to hold a share of 38.2% in the North America yogurt market. Greek yogurt will follow this lead quite closely. In terms of regions, the U.S. is likely to dominate the market as the country is projected to surge at a CAGR of 3.7% between 2016 and 2024. Greek Yogurt Continues to Show Promise of Growth through Forecast Period as Preference Remains Steady The yogurt market across North America received a massive impetus after the introduction of Greek yogurt. The revolution since then has garnered a significant clientele, which has continuously shaped the trajectory of the overall market. The demand for Greek yogurt, which holds about 40% share in the total market, is expected to be on the rise as it contains few carbohydrates and fats. This type of yogurt is known to be rich in proteins and calcium, which has been its key growth drivers amongst the fitness-conscious consumers. Today, the North America yogurt market is on the cusp of a revolution has several manufacturers in the market are introducing a variety of flavors to favor myriad palates. The relentless growth of the dairy industry in the U.S. has also been fueling the North America yogurt market. “The large-scale operations of dairy industry, adoption of innovative technologies, and continuous efforts to bring in product diversification has changed perceptions about yogurt, putting it on pedestal amongst consumers seeking healthy food options,” states the lead author of this research report. The market has also benefitted with increasing investments from several big and small players, who have ardently diversified the product through methods of making and packaging. The changing lifestyles, improving disposable incomes, and growing awareness about living healthy lifestyles are all expected to make a significant difference to the soaring revenue of the North America Yogurt market in the near future. Maturing Demand for Yogurts to Challenge Overall Market Analysts suspect that the demand for Greek yogurt is likely to mature, which is likely to impact the sales in the forecast period. Owing to this reason, manufacturers will shift their focus to other types of yogurt, which might hamper the sales even more. Though the yogurt market is likely to mature, the potential for yogurt drinks is estimated to be relatively. These come in a wide range of flavors and are gaining popularity amongst consumers. This review is based on Transparency Market Research’s report, titled “Yogurts Market - North America Industry Analysis, Size, Share, Growth, Trends, and Forecast 2016 - 2024.” North America yogurt market can be segmented as follows:
News Article | December 2, 2016
According to a new market report published by Transparency Market Research "Yogurts Market By Product Type (Traditional Yogurt, Australian Yogurt, Icelandic Yogurt, Greek Yogurt, Non-Dairy Yogurt, Kids Yogurt and Other Yogurts), By Packaged Containers (Cups, Pouch, Tubs, and Bottles), - North America Industry Analysis, Size, Share, Growth, Trends and Forecast, 2016- 2024" the North America yogurt market was valued at USD 11.18 billion in 2015 and is expected to reach USD 14.59 billion by 2024, growing at a CAGR of 3.0% from 2016 to 2024. Yogurt is a diversified product. Besides the traditional yogurt, other varieties of yogurts most commonly consumed are Greek yogurt, Icelandic yogurt, Australian yogurt and kids' yogurt. Greek yogurt, Australian yogurt and Icelandic yogurt, unlike traditional yogurts are strained yogurts. During the straining process, the yogurt is strained to remove the extra liquid content commonly known as whey. Owing to the removal of whey, strained yogurt are denser and thicker, with relative high protein content. Greek yogurt and Icelandic yogurt are simple strained yogurt. However, Icelandic yogurt, originating from Iceland, have a milder flavor in comparison to Greek yogurt. Whereas, Australian yogurts are also strained yogurt but mixed with honey for improved taste and flavor. Variety of kids' yogurt are available for the consumers. Most of the kids' yogurt are generally organic yogurt with additional flavors for improved taste. In terms of product types, the yogurt market has been segmented into Traditional yogurt, Australian yogurt, Icelandic yogurt, Greek yogurt, Non-dairy yogurt, Kids yogurt and other yogurts. Greek yogurt is the fastest growing product segment in the North America yogurt market. Greek yogurt also accounts for considerable revenue demand, second only to the traditional yogurts category. Traditional yogurt is the largest product type owing to its low price, and widespread availability. Traditional yogurts the most produced yogurt type hence they are ready available in both online and offline retail outlets. However, the demand for kids' yogurt is also on the due to the health benefits of yogurts. Moreover, to augment the sale of kids' yogurt the manufacturers are coming up with new products with new taste and flavors at a regular interval. As the commercially available yogurt products tend to reach product lifecycle maturity, the year on year growth of the yogurt market is expected to slow down during the forecast period in comparison to the last decade. In terms of packaged containers, the yogurt market has been segmented into cups, pouch, tubs and bottles. Yogurt pouch is projected to be the fastest growing packaged container segment in North America during the forecast period. Cups accounted for the largest product segment in 2015, with 68.8% market share of the total North America yogurt market demand. Owing to the low packaging cost and ease of use, the demand for yogurt cups is anticipated to grow during the forecast period. Packaging plays a crucial role in the success of a desert items such as yogurt. Hence companies are investing considerable amount on the development and diversification of packaging materials to reduce cost, increase product attractiveness among consumer and also to increase the shelf life of the packaged products. Get Industry Research Report Sample for more Professional and Technical Industry Insights: http://www.transparencymarketresearch.com/sample/sample.php?flag=B&rep_id=1043 By geography, the North America yogurt market is segmented into U.S. and Rest of North America. Per person per year yogurt consumption in Canada is substantially higher with respect to the U.S. However, the higher population and presence of major players in the U.S. is driving the U.S. yogurts market. Per person per year yogurt consumption in U.S. was 7.7 in 2015. Whereas, per person per year yogurt consumption of yogurt was recorded at 11 kg in 2015. Low per person per year consumption of yogurt is expected to be a major restrain for the growth of the North America yogurt market demand. The report provides company market share analysis of the various industry participants. Key players have also been profiled on the basis of company overview, financial overview, business strategies and recent developments. Major market participants profiled in this report are Dannon Inc. (U.S.), Fage International S.A (Luxembourg), Chobani, LLC (U.S.), Yoplait USA, INC (U.S.), Noosa Yogurt LLC (U.S.), The Icelandic Milk and Skyr Corporation (U.S.), Stonyfield Farm (U.S.), Annie's Homegrown (U.S.), AtlantaFresh (U.S.) and Berkeley Farms (U.S.) among others. North America yogurt market can be segmented as follows: Transparency Market Research (TMR) is a global market intelligence company providing business information reports and services. The company's exclusive blend of quantitative forecasting and trend analysis provides forward-looking insight for thousands of decision makers. TMR's experienced team of analysts, researchers, and consultants use proprietary data sources and various tools and techniques to gather and analyze information. TMR's data repository is continuously updated and revised by a team of research experts so that it always reflects the latest trends and information. 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