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Yogurt: The Current Culture

Though stalled by the recession, the yogurt category is rebounding driven by interest in premium, allnatural, organic, Greek-style and functional products such as those with probiotics. Sales of yogurt and yogurt drinks grew a healthy 32 percent from 2004 to 2009, reaching nearly $4.1 billion in food, drug and mass-merchant channels, reports Mintel International. Premium, all-natural, organic, Greek-style and functional products such as those with probiotics are driving growth. (Mintel defines the yogurt market as including refrigerated yogurt; refrigerated yogurt drinks; frozen yogurt/tofu; and shelf-stable yogurt/yogurt mixes.) The recession slowed yogurt sales in 2009 as consumers perceived it as a discretionary product purchase. A steep decline in yogurt drinks salesthe highest-priced segmentoffset growth in the refrigerated and frozen yogurt/tofu segments. Following four years of 6.5 percent average compounded annual growth from 2004 to 2008, yogurt drinks growth slowed to 2.8 percent in 2009. THE MARKET KEY POINTS Refrigerated yogurt is the categorys largest segment, with 86 percent of sales. Growth has outpaced all other segments, increasing 40 percent from 2004 to 2009 in food, drug and mass-merchant channels (FDM). An influx of premium, natural, organic and functional/probiotic offerings has fueled interest in the category. Premium yogurts are outpacing total category growth. In the refrigerated segment, small Other brands (with less than 5 percent market share) grew 17.1 percent from August 2008-2009, nearly triple the pace of the category. These brands include Chobani, The Greek Gods, Fage Total, Mountain High, Rachels Wickedly Delicious and GlenOaks. At the other end of the price spectrum, private-label sales are also up. Store brand sales grew nearly 4 percent from August 2008 to Auguat 2009.

The recession hurt sales of yogurt drinks which declined 2.6 percent from 2007 to 2009. Yogurt drinks in particular were hurt by high prices relative to regular yogurt. The frozen yogurt/tofu segment benefited from the troubled economy. Following sales declines in 2005 and 2006, sales rebounded beginning in 2007 as recession-stricken consumers sought to comfort themselves with small indulgences. THE MARKET

Consumers desires to eat healthy and a growing awareness of yogurts active-culture health benefits grew refrigerated yogurt 2.5 percent since 2007, despite the economy. An explosion of new premium, functional/probiotic and natural/organic offerings has helped generate interest and raise retail prices. Following several years of rising consumption, yogurt drink sales fell in 2009 in part due to premium pricing. Consumer perception of yogurt drinks as high calorie has also led many to switch to lighter versions or drink them less often or not at all.

Sales of yogurt at natural foods stores grew 14 percent thanks to an emergence of new local and artisan brands. But the real story is in the 18.4 percent growth of smaller Other brands. Among these brands, Redwood Hill Farms goat yogurts surged 30 percent from 2007 to 2009 to $10.5 million, while Seattlebased Greek Gods saw sales leap from just less than $1 million in 2007 to $5.4 million in 2009. THE CONSUMER KEY POINTS Refrigerated yogurt consumption among adults increased from 52 percent in 2003 to 56 percent in 2009, especially among those aged 25-44. Sixty-eight percent of women eat refrigerated yogurt/yogurt drinks, compared to only 43 percent of men.

Teens exhibit the highest incidence of eating refrigerated yogurt among any other group: 59 percent. Yogurt usage among kids ages six-11 reached 54 percent in 2009, driven by an influx of products targeted to the younger set. The two most important attributes consumers consider when purchasing yogurt are flavor selection and price. Consumers are most concerned that yogurt is low in fat and calories, both cited by 50 percent of respondents. High calcium, live active cultures, low sugar and all natural also rank among important claims. Interest in probiotics is relatively low at 24 percent due in part to consumer confusion.

Yogurt consumption is on the rise, driven by the healthy eating trend and growing awareness of yogurts health benefits. Some 56 percent of adults 18+ use refrigerated yogurt/yogurt drinks. Low-fat yogurt is most popular, followed by regular yogurt, used by 54 percent and 47 percent of yogurt eaters, respectively. Yogurt drink usage grew to 16 percent, though its growth did slip in 2009. Frozen yogurt consumption has declined since 2003, but sales have recently grown, perhaps because consumers turned to it as an affordable treat during the recession. NEW PRODUCTS AND TRENDS KEY POINTS The hottest trends in the yogurt market are: organic and natural; functional yogurts made with probiotics, high protein and fiber; Greek-style yogurt; indulgent dessert-style yogurts and kid-targeted products. Whole grain, a major trend in other categories, has recently hit the yogurt market. The economic recession spurred a flood of private-label organic and natural yogurts, such as Supervalus Wild Harvest Lowfat Organic yogurt, targeted to consumers who would like to eat more organic foods, but arent willing to pay a high price. More than 1,200 new yogurt products were introduced in the U.S. since 2005. The refrigerated yogurt segment accounted for two-thirds of new products. Although product introductions fell off in 2009 amid a troubled economy, refrigerated yogurts still led in number of rollouts. Frozen yogurt was the only segment to show an increase in new products since 2008.

Low/no/reduced fat; kosher; and vitamin/mineral fortified were the top three new product claims for yogurt in 2009. No additives/preservatives; high protein; and ethical or charity-based claims were the only three to increase since 2008, pointing to some emerging trends. RECENT NEW PRODUCT INTRODUCTIONS Laloos Goat Milk Frozen Yogurts: available in new probiotic varieties. Ricera Foods Rice Yogurt: made with organic brown rice; enriched with vitamins A and D2; vegan, whole grain, low-fat, no GMOs, dairy, soy or gluten. siggis Icelandic Style Skyr Strained Non-Fat Yogurt: all natural, high protein. Sun Valley Dairys Voskos All Natural Non-Fat Greek-Style Yogurt: high in protein and contains live and active probiotic cultures; free from rBST, rBGH and GMOs. Also offers a range of plain Greek-style yogurts that are gluten-free. SuperValus Wild Harvest Organic Low Fat Yogurt: contains 1 percent milk fat grade A and live active cultures. Trader Joes Organic Greek-Style Non-Fat Yogurt: high in calcium. Tula Foods Better Whey of Life All Natural Non-Fat Yogurt: contains 15 to 17 grams of protein in every 6ounce cup; also contains probiotics and 30 percent less sugar than leading yogurts. Editors Note: Specialty Food Magazine is pleased to be working with Mintel on Research Spotlight. Mintel is a leading supplier of competitive media, product and consumer data. A 33-year reputation for delivering dependable and original market information has allowed Mintel to maintain Business Superbrand status in the U.K. Mintels product line includes: Mintel Reports, a renowned market intelligence report series, publishing more than 600 reports annually covering the U.S. and Europe; and Mintels GNPD, the Global New Products Database, which monitors worldwide product innovation in consumer packaged goods markets. For more information call 312.943.5250 or visit www.mintel.com. NASFT members may purchase Mintels yogurt report at a 10 percent discount.