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Chobani Is Betting You Won’t Miss the Dairy in Its New Yogurt

January 9, 2019, 10:00 AM UTC

Chobani, the largest yogurt brand in the U.S., is starting to look beyond dairy.

This month the Norwich, N.Y.-based food company is launching nine coconut-based yogurts as it looks to capitalize on consumers’ growing interest in plant-based alternatives to products traditionally derived from animals.

“We have dairy in our veins for sure,” says Peter McGuinness, Chobani’s chief marketing and commercial officer, “but there’s this emerging non-dairy part of the yogurt aisle that’s here to stay.”

Plant-based products currently make up just 2% of the $8.5 billion U.S. yogurt market but grew one percentage point last year—a bright spot in the once-high flying yogurt category that is now experiencing declines.

Chobani surveyed the non-dairy products already on the market and felt as though consumers were being underserved. “There are a lot of plant-based products out there that are very tough to eat,” says McGuinness. To Chobani’s executives, existing products were either too watery, had a strange texture, or contained too much sugar.

Chobani grew its fortunes by capitalizing on similar holes in the yogurt market some 10 years ago. Founder Hamdi Ulukaya saw that Greek yogurt was a tiny fraction of the overall segment but believed that no one was doing it well. A decade later, Greek makes up 50% of the yogurt category and its rise—led by Chobani—has fueled the yogurt market’s growth over the last decade.

Admittedly, McGuinness does not believe that plant-based will get anywhere near the level of Greek; the CEO of Danone North America, which this month will launch a coconut milk yogurt under its Oikos brand, has said it could reach 10%.

Chobani is starting its non-dairy line with a coconut base but McGuinness says it could expand into other plants. Some of its competitors, for example, use the likes of soy and almonds. Plant-based formulas have little naturally occurring protein —one of the big selling points of yogurt—so Chobani is touting its other nutritional benefits like probiotics, the company’s use of natural ingredients, and that its product contains less sugar than its competitors.

Vegans and lactose intolerant consumers are not the only ones driving the plant-based movement. A recent Mintel report found that 17% of yogurt buyers say they are eating less dairy for their health. Consumers eschewing dairy is one of the reasons that overall U.S. retail sales of yogurt have been on the decline since 2015. Mintel expects the market to fall another 3.5% by 2023.

In addition to plant-based products, Chobani has tried to reinvigorate yogurt sales by launching lower-sugar products and a line for kids.

McGuinness also hinted that Chobani could at some point look beyond the dairy aisle altogether. “We stand for more than the products we currently make,” he says. “The brand is elastic and stretchable. For us it’s when and what’s first.”