Chobani, LLC: Executive Summary
I. Executive Summary Chobani was founded a mere nine years ago, in 2005. Their founder, Hamdi Ulukaya, a then recent immigrant from Turkey had found the yogurt selection in the United States lacking a high quality alternative to the traditional American type yogurts that so dominated the super market aisles. Seeking to fill this niche of a high quality yogurt produced domestically, the Chobani Limited Liability Corporation was formed.
II. Environmental Analysis
In the summer of 2013, the yogurt company, Chobani, LLC introduced their most recent product, which was called the Chobani Flip. While it was not exactly a new product for the yogurt market, it allowed the company a vehicle into a new aspect of the yogurt market. Although new, the Chobani Flip is in keeping with the high …show more content…
standards that Chobani sets for all their products.
The Flip is Chobani’s method of providing an assortment of solid ingredients to a suitable flavor of yogurt. The package is plastic, square in shape on the top, and houses two separate compartments covered by foil below. After the foil is removed, the package is bent in half, introducing the solid components, such as nuts, chocolate, graham cracker crumbles, seeds, and such to the yogurt compartment. Other competitors have similar products, mainly ones that add jelly or fruit mash. Chobani’s unique and healthful blends of organic components make it distinctive.
A. The Marketing Environment
Competition in any section of a food aisle can be intense. Chobani is a Greek style yogurt, much different from traditional American style yogurts. Straining removes water content and results in a denser product with higher protein content (Hiatt & Haupt, 2011). Chobani has seen great increases in sales of their yogurt, which has nudged or inspired competitors to move into the Greek style market as well, while there still remains competition from traditional yogurt in the dairy case.
Economically, Greek style yogurt faces a distinct disadvantage in terms of cost. The straining which thickens the consistency of the product requires much more milk, thus increasing the cost versus traditional yogurt. Additionally, Chobani’s insistence upon the best ingredients and an adherence to organic standards for the solid components requires a higher pricing to make a profit for the Flip.
Legal and regulatory forces that Chobani faces are similar to their competitors. Chobani must meet Food and Drug Administration (FDA) requirements to provide a clean and safe facility where their lines can be produced without putting the consumer in harm’s way. However, Chobani’s insistence on top quality ingredients originally required only organic milk. Chobani’s previous success and meteoric increases in sales has resulted in their production requirement outstripping the supply of such milk. As a result, Chobani has had to modify this requirement and temper their organic claims of their products, such as the Flip so as to meet labeling requirements (Cazentre, 2013).
Sociocultural forces the Flip must face are ease of use, taste, and perception. The Flip is essentially a time saver. Consumers are presented with high quality yogurt and a complementing blend of solid ingredients, such as key lime with graham crackers and white chocolate chips. These blends must appeal on a higher level to inspire them to buy a higher priced item. Chobani must be effective in making consumers perceive the Flip as a better tasting and healthier product than alternative yogurt products in the dairy case.
B. Target Markets In the last decade, yogurt consumption has increased over one hundred percent, due in some part to the perceived better taste of Greek style yogurt. The greatest increase in yogurt consumption was among the 18-34 age demographic. Over three quarters of yogurt consumption occurs in the house. Primarily, this has been an increase seen at breakfast and as an in between snack. The Flip is a good alternative as either breakfast or a snack to individuals or young families (Satran, 2013). Greek yogurt’s density provides a good source of muscle building protein to athletes. The high quality ingredients and organic requirements, in addition to digestive- friendly live- bacteria cultures, can appeal to healthful seeking segment. Smaller portions aimed at young children can foster a life long love of yogurt. Additionally, the Flip is ideal for the increasingly popular diets that require eating more frequently of meals of less calories throughout the day, essentially being a defined calorie meal with multiple tastes contained within the package.
III. SWOT Analysis
A. Strengths
1. Established position in the dairy case Chobani has gained for their products in most supermarkets.
2. Perception of Chobani as high quality yogurt by consumers.
3. The Greek style consistency resulting in a denser product with more protein.
4. The organic requirements required of the suppliers by the company.
5. The company’s philanthropic endeavors, donating ten percent of profits to charities that meet their “Do only good” philosophy (PR News Wire, 2012) .
6. Favorable demographics in the yogurt market.
7. Chobani’s established and strong social marketing presence on both Facebook and Twitter.
B. Weaknesses
1. Higher price due to many factors, such as increased milk requirements from the straining process and organic requirements for suppliers from the company.
2. Increased competition in the Greek style yogurt market by more established companies such as Dannon and Yoplait that previously focused on more traditional American style yogurt.
3.
Chobani is still a privately held company, limiting the amount of capital it can raise compared to publicly traded competitors.
4. Some higher end supermarkets such as Whole Foods have stopped selling Chobani due to the decision to not exclusively use organic milk, thus potentially damaging Chobani’s overall reputation amongst higher end consumers (Cazentre, 2013).
C. Opportunities
1. Continuation of favorable consumption patterns of 18-34 demographic to their young families.
2. Positioning of the Flip as an all- in- one meal replacement that includes protein, vitamins, and fiber to those adhering to diets or a more regimented eating pattern.
3. Emphasizing the protein content and healthful features of Greek style yogurt to athletes and those seeking a proper recovery meal after physical activity.
4. Capitalizing on Chobani’s strong social media presence with existing consumers of Chobani products.
5. The company is opening stores in high profile metropolitan areas such as the SoHo District in New York City, and other cities such Chicago, and San Francisco (Owens, 2013).
D. Threats
1. Increased costs in materials which results in a price too high for many
consumers.
2. Limited ability of suppliers to provide enough organic materials to support Chobani’s widespread production.
3. Perception of Greek style yogurt as a passing fad.
4. Increasing competition in the dairy case as competitors more closely copy the Flip’s premise of matching certain solid components to a certain yogurt flavor.
5. Possible recalls of products due to contamination or not meeting FDA regulations.
E. Matching Strengths to Opportunities The company’s social media positioning cannot be understated. Having nearly a million followers on Facebook and over eighty thousand on Twitter, the company was able to create a positive buzz amongst their consumer base, many who were soon watching out for the Flip’s introduction to their own dairy case. Social media can skew younger, matching the favorable demographics for consumption. Additionally, Chobani has become an official sponsor of the United States Olympic team, and has increased advertising during sporting events. Emphasizing the beneficial aspects of the Flip to athletes also perpetuates the healthful nature of the organic components of the product. The stores located in high profile metropolitan areas can perpetuate the high quality perception of the company’s product lines, such as the Flip.
F. Converting Weaknesses and Threats Due to increased competition in the Greek style yogurt market, there are many concerns going forward. Maintaining the price in line with competition is imperative to keeping or increasing market share. The following table from the blog, Midwestern Bites, compares the prices, sizes, protein and sugar contents, and finally prices of competing yogurts. It is important for the Chobani flip to be affordable, but especially in comparison to more specific competition within the Greek style yogurt market. Chobani’s increased production capabilities have allowed the company to provide a high quality yogurt at a more than competitive price (Cazentre, 2013). Unfortunately, having taken hit by not being able to use organic certified milk exclusively in production has reduced the reputation somewhat, the company can still compete against more estabished competitors in terms of price positioning.
Table 1: Greek Style Yogurt Comparison by Brand
(Source: http://midwesternbite.com/the-chobani-bandwagon/)
IV. Marketing Objectives Marketing the Flip should be a continuation of other marketing the Chobani name. Chobani has built its success upon emphasizing the high quality ingredients utilized in production and the overall quality of their yogurts. The Flip is merely an extension of this philosophy. Social media and traditional advertising should promote the relative uniqueness of the yogurt and solid ingredient combinations available. Further promotion of the healthy benefits of Chobani yogurt is important, also.
V. Marketing Strategies
A. Target Markets
Target Market 1: Young individuals, 18-34 and their young families. Example: Targeted through social media and more directed avenues such as age appropriate publications and family centric television shows.
Target Market 2: Athletes and frequent exercisers. Example: Advertisements placed in appropriate publications, such as fitness magazines, and placement of commercials during sporting events.
Target Market 3: Those seeking a more organic and healthy yogurt product. Example: Underwriting a National Public Radio program, advertisements in fitness publications, or strategic ads on health blogs.
B. Marketing Mix
1. Product. The Chobani Flip is an extension of the Chobani overall brand. Its blending of unique flavors and complementing yogurt is the company’s attempt to compete with other established, similar products available from competitors. What makes it exclusive is the organic nature of the solid components and the emphasis on quality yogurt.
2. Price. Compared to traditional American style yogurt, the thicker consistency of the product requires more milk for production, and therefore a higher price when compared to products using traditional American style yogurt. However, the production capacity of Chobani allows the price to be kept in line with its Greek style competitors. The organic requirements add to the cost, but again, production allows for a competitive pricing structure for the Flip.
3. Distribution. Chobani is an established brand with positioning in existing dairy cases. These established venues give the product exposure to many consumers.
4. Promotion. Chobani should utilize their existing social media structure and capabilities. Including the Flip in their Olympic team advertising should be utilized.
VI. Evaluations and Control An important metric in determining the success or failure of the product launch will be sales analysis. It is essential to compare the sales of the Flip versus other comparable items. Additionally, it will be key to determine if sales of the Flip come against competition, or whether the sales come at the expense of other Chobani products (Pride and Ferrel, 2014). Other criteria should be utilized also. Analysis of social media patterns and mentions or likes could be an avenue of approach for evaluation of the marketing roll out. This can be used specifically in conjunction with other advertising, for example, looking for mentions of the Olympic Team advertising with Chobani.
References
Cazentre, D. (2013). Chobani vs. Whole Foods: A battle over 'organic ' and 'non-GMO '.
Retrieved from http://www.syracuse.com/food/index.ssf/2013/12/chobani_vs_whole_foods_a_battl.html Hiatt, K., Haupt, A. (2011) Greek Yogurt vs. Regular Yogurt: Which is more Healthful? Retrieved from http://health.usnews.com/health-news/diet- fitness/diet/articles/2011/09/30/greek-yogurt-vs-regular-yogurt-which-is-more-healthful
Owen, J. (2013) Packaged Facts: Greek Yogurt Sales Jumped more than 50%. Retrieved from http://www.drugstorenews.com/article/packaged-facts-greek-yogurt-sales-jumped-more- 50-2012?ad=latest-news
PR News Wire.(2012). Sheperd’s Gift Foundation Announces First Group of 2012 Recipients.
Retrieved from http://www.prnewswire.com/news-releases/shepherds-gift-foundation-announces-first-group-of-2012-recipients-162044705.html
Pride, W., Ferrel, O.C. (2014). Marketing (2014 Ed.). Mason, OH: South-Western,
Cengage Learning.
Satran, J. (2013). Yogurt Sales Growth Has Been Driven By The Young, Study Finds. Retrieved From http://www.huffingtonpost.com/2013/01/31/yogurt-sales-growth- study_n_2574626.html
Ulukaya, H. (2013). Chobani’s Founder on Growing a Start-Up Without Outside Investors.
Retrieved from http://hbr.org/2013/10/chobanis-founder-on-growing-a-start-up-without-outside-investors/ar/1
II. Environmental Analysis
In the summer of 2013, the yogurt company, Chobani, LLC introduced their most recent product, which was called the Chobani Flip. While it was not exactly a new product for the yogurt market, it allowed the company a vehicle into a new aspect of the yogurt market. Although new, the Chobani Flip is in keeping with the high …show more content…
standards that Chobani sets for all their products.
The Flip is Chobani’s method of providing an assortment of solid ingredients to a suitable flavor of yogurt. The package is plastic, square in shape on the top, and houses two separate compartments covered by foil below. After the foil is removed, the package is bent in half, introducing the solid components, such as nuts, chocolate, graham cracker crumbles, seeds, and such to the yogurt compartment. Other competitors have similar products, mainly ones that add jelly or fruit mash. Chobani’s unique and healthful blends of organic components make it distinctive.
A. The Marketing Environment
Competition in any section of a food aisle can be intense. Chobani is a Greek style yogurt, much different from traditional American style yogurts. Straining removes water content and results in a denser product with higher protein content (Hiatt & Haupt, 2011). Chobani has seen great increases in sales of their yogurt, which has nudged or inspired competitors to move into the Greek style market as well, while there still remains competition from traditional yogurt in the dairy case.
Economically, Greek style yogurt faces a distinct disadvantage in terms of cost. The straining which thickens the consistency of the product requires much more milk, thus increasing the cost versus traditional yogurt. Additionally, Chobani’s insistence upon the best ingredients and an adherence to organic standards for the solid components requires a higher pricing to make a profit for the Flip.
Legal and regulatory forces that Chobani faces are similar to their competitors. Chobani must meet Food and Drug Administration (FDA) requirements to provide a clean and safe facility where their lines can be produced without putting the consumer in harm’s way. However, Chobani’s insistence on top quality ingredients originally required only organic milk. Chobani’s previous success and meteoric increases in sales has resulted in their production requirement outstripping the supply of such milk. As a result, Chobani has had to modify this requirement and temper their organic claims of their products, such as the Flip so as to meet labeling requirements (Cazentre, 2013).
Sociocultural forces the Flip must face are ease of use, taste, and perception. The Flip is essentially a time saver. Consumers are presented with high quality yogurt and a complementing blend of solid ingredients, such as key lime with graham crackers and white chocolate chips. These blends must appeal on a higher level to inspire them to buy a higher priced item. Chobani must be effective in making consumers perceive the Flip as a better tasting and healthier product than alternative yogurt products in the dairy case.
B. Target Markets In the last decade, yogurt consumption has increased over one hundred percent, due in some part to the perceived better taste of Greek style yogurt. The greatest increase in yogurt consumption was among the 18-34 age demographic. Over three quarters of yogurt consumption occurs in the house. Primarily, this has been an increase seen at breakfast and as an in between snack. The Flip is a good alternative as either breakfast or a snack to individuals or young families (Satran, 2013). Greek yogurt’s density provides a good source of muscle building protein to athletes. The high quality ingredients and organic requirements, in addition to digestive- friendly live- bacteria cultures, can appeal to healthful seeking segment. Smaller portions aimed at young children can foster a life long love of yogurt. Additionally, the Flip is ideal for the increasingly popular diets that require eating more frequently of meals of less calories throughout the day, essentially being a defined calorie meal with multiple tastes contained within the package.
III. SWOT Analysis
A. Strengths
1. Established position in the dairy case Chobani has gained for their products in most supermarkets.
2. Perception of Chobani as high quality yogurt by consumers.
3. The Greek style consistency resulting in a denser product with more protein.
4. The organic requirements required of the suppliers by the company.
5. The company’s philanthropic endeavors, donating ten percent of profits to charities that meet their “Do only good” philosophy (PR News Wire, 2012) .
6. Favorable demographics in the yogurt market.
7. Chobani’s established and strong social marketing presence on both Facebook and Twitter.
B. Weaknesses
1. Higher price due to many factors, such as increased milk requirements from the straining process and organic requirements for suppliers from the company.
2. Increased competition in the Greek style yogurt market by more established companies such as Dannon and Yoplait that previously focused on more traditional American style yogurt.
3.
Chobani is still a privately held company, limiting the amount of capital it can raise compared to publicly traded competitors.
4. Some higher end supermarkets such as Whole Foods have stopped selling Chobani due to the decision to not exclusively use organic milk, thus potentially damaging Chobani’s overall reputation amongst higher end consumers (Cazentre, 2013).
C. Opportunities
1. Continuation of favorable consumption patterns of 18-34 demographic to their young families.
2. Positioning of the Flip as an all- in- one meal replacement that includes protein, vitamins, and fiber to those adhering to diets or a more regimented eating pattern.
3. Emphasizing the protein content and healthful features of Greek style yogurt to athletes and those seeking a proper recovery meal after physical activity.
4. Capitalizing on Chobani’s strong social media presence with existing consumers of Chobani products.
5. The company is opening stores in high profile metropolitan areas such as the SoHo District in New York City, and other cities such Chicago, and San Francisco (Owens, 2013).
D. Threats
1. Increased costs in materials which results in a price too high for many
consumers.
2. Limited ability of suppliers to provide enough organic materials to support Chobani’s widespread production.
3. Perception of Greek style yogurt as a passing fad.
4. Increasing competition in the dairy case as competitors more closely copy the Flip’s premise of matching certain solid components to a certain yogurt flavor.
5. Possible recalls of products due to contamination or not meeting FDA regulations.
E. Matching Strengths to Opportunities The company’s social media positioning cannot be understated. Having nearly a million followers on Facebook and over eighty thousand on Twitter, the company was able to create a positive buzz amongst their consumer base, many who were soon watching out for the Flip’s introduction to their own dairy case. Social media can skew younger, matching the favorable demographics for consumption. Additionally, Chobani has become an official sponsor of the United States Olympic team, and has increased advertising during sporting events. Emphasizing the beneficial aspects of the Flip to athletes also perpetuates the healthful nature of the organic components of the product. The stores located in high profile metropolitan areas can perpetuate the high quality perception of the company’s product lines, such as the Flip.
F. Converting Weaknesses and Threats Due to increased competition in the Greek style yogurt market, there are many concerns going forward. Maintaining the price in line with competition is imperative to keeping or increasing market share. The following table from the blog, Midwestern Bites, compares the prices, sizes, protein and sugar contents, and finally prices of competing yogurts. It is important for the Chobani flip to be affordable, but especially in comparison to more specific competition within the Greek style yogurt market. Chobani’s increased production capabilities have allowed the company to provide a high quality yogurt at a more than competitive price (Cazentre, 2013). Unfortunately, having taken hit by not being able to use organic certified milk exclusively in production has reduced the reputation somewhat, the company can still compete against more estabished competitors in terms of price positioning.
Table 1: Greek Style Yogurt Comparison by Brand
(Source: http://midwesternbite.com/the-chobani-bandwagon/)
IV. Marketing Objectives Marketing the Flip should be a continuation of other marketing the Chobani name. Chobani has built its success upon emphasizing the high quality ingredients utilized in production and the overall quality of their yogurts. The Flip is merely an extension of this philosophy. Social media and traditional advertising should promote the relative uniqueness of the yogurt and solid ingredient combinations available. Further promotion of the healthy benefits of Chobani yogurt is important, also.
V. Marketing Strategies
A. Target Markets
Target Market 1: Young individuals, 18-34 and their young families. Example: Targeted through social media and more directed avenues such as age appropriate publications and family centric television shows.
Target Market 2: Athletes and frequent exercisers. Example: Advertisements placed in appropriate publications, such as fitness magazines, and placement of commercials during sporting events.
Target Market 3: Those seeking a more organic and healthy yogurt product. Example: Underwriting a National Public Radio program, advertisements in fitness publications, or strategic ads on health blogs.
B. Marketing Mix
1. Product. The Chobani Flip is an extension of the Chobani overall brand. Its blending of unique flavors and complementing yogurt is the company’s attempt to compete with other established, similar products available from competitors. What makes it exclusive is the organic nature of the solid components and the emphasis on quality yogurt.
2. Price. Compared to traditional American style yogurt, the thicker consistency of the product requires more milk for production, and therefore a higher price when compared to products using traditional American style yogurt. However, the production capacity of Chobani allows the price to be kept in line with its Greek style competitors. The organic requirements add to the cost, but again, production allows for a competitive pricing structure for the Flip.
3. Distribution. Chobani is an established brand with positioning in existing dairy cases. These established venues give the product exposure to many consumers.
4. Promotion. Chobani should utilize their existing social media structure and capabilities. Including the Flip in their Olympic team advertising should be utilized.
VI. Evaluations and Control An important metric in determining the success or failure of the product launch will be sales analysis. It is essential to compare the sales of the Flip versus other comparable items. Additionally, it will be key to determine if sales of the Flip come against competition, or whether the sales come at the expense of other Chobani products (Pride and Ferrel, 2014). Other criteria should be utilized also. Analysis of social media patterns and mentions or likes could be an avenue of approach for evaluation of the marketing roll out. This can be used specifically in conjunction with other advertising, for example, looking for mentions of the Olympic Team advertising with Chobani.
References
Cazentre, D. (2013). Chobani vs. Whole Foods: A battle over 'organic ' and 'non-GMO '.
Retrieved from http://www.syracuse.com/food/index.ssf/2013/12/chobani_vs_whole_foods_a_battl.html Hiatt, K., Haupt, A. (2011) Greek Yogurt vs. Regular Yogurt: Which is more Healthful? Retrieved from http://health.usnews.com/health-news/diet- fitness/diet/articles/2011/09/30/greek-yogurt-vs-regular-yogurt-which-is-more-healthful
Owen, J. (2013) Packaged Facts: Greek Yogurt Sales Jumped more than 50%. Retrieved from http://www.drugstorenews.com/article/packaged-facts-greek-yogurt-sales-jumped-more- 50-2012?ad=latest-news
PR News Wire.(2012). Sheperd’s Gift Foundation Announces First Group of 2012 Recipients.
Retrieved from http://www.prnewswire.com/news-releases/shepherds-gift-foundation-announces-first-group-of-2012-recipients-162044705.html
Pride, W., Ferrel, O.C. (2014). Marketing (2014 Ed.). Mason, OH: South-Western,
Cengage Learning.
Satran, J. (2013). Yogurt Sales Growth Has Been Driven By The Young, Study Finds. Retrieved From http://www.huffingtonpost.com/2013/01/31/yogurt-sales-growth- study_n_2574626.html
Ulukaya, H. (2013). Chobani’s Founder on Growing a Start-Up Without Outside Investors.
Retrieved from http://hbr.org/2013/10/chobanis-founder-on-growing-a-start-up-without-outside-investors/ar/1