Greek Yogurt Whitepaper v11
The Big Picture: Winners & Losers of the Greek Yogurt Phenomenon
The distribution of shoppers in Greek yogurt vs. non-‐Greek yogurt reveals that Greek yogurt appeals to a distinct, and valuable, set of shoppers in the category. Of the top ten indexing segments, three fall in each of the “Watching the Waistline” and
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Source: SymphonyIRI
Introduction Greek yogurt sales have more than doubled in each of the last three years, while non-‐Greek yogurt has grown at only a single-‐digit pace, according to Nielsen. Since the start of 2012, news articles commenting on the phenomenon have been published by The Wall Street Journal, The Associated Press, and the Chicago Tribune. The category has changed so much that, according to SymphonyIRI, Greek-‐style Chobani is now the #1 branded yogurt product by dollar sales, overtaking flagship brand Yoplait Light and its 25 different flavors. Growth vs. YAGO ($) This growth is staggering in its (select brands only) own right, but especially so 144% Greek considering that a single-‐serve Non-‐Greek container of Greek yogurt is 60% 37% usually 30-‐ to 50 cents more 40% 15% expensive than non-‐Greek. 20% 9% This premium has contributed 0% -‐1% to Total Yogurt growth rate of -‐7% -‐16% 9% in dollars, despite a 3% -‐20% decline in units. But questions remain as to who the Greek yogurt shopper is, what the motivations are driving this behavior, and how the trend translates to other categories. A Distinct, Affluent, and Health-‐Focused Shopper To understand the Greek yogurt shopper at a high level, we can look at the distribution of shoppers by what type of consumer they are. For this, we can leverage Spire’s proprietary Essence™ segmentation. Essence™ shopper segments are behaviorally built on the premise that “you are what you buy,” and are driven by item-‐level purchasing across the store. Each household is segmented based on affluence, presence of kids, cooking style, health/wellness needs (including dieting style and special dietary needs), ethnicity, and presence of pets. The combination of these attributes results in 40 Essence™ segments that can be organized into 16 rough groupings, capturing advanced insight into shopping needs/habits. (See appendix).
“Healthy Living” groups. In addition, two fall in “Natural Organic” segments, and one falls in each of “Premium Families with Babies” and “Finest-‐Focused Families.” The Greek yogurt shopper is highly upscale and highly health-‐conscious. Moreover, all ten segments Essence Segment Incidence Index have an index greater than (% of Focus HH's in Segment / % of Gen. Pop. HH's in Segment) Top 10 Greek yogurt shopper segments only 175, i.e. the incidence of 0 100 200 300 households falling in a Natural & Organic Couples given segment for Greek Natural & Organic Families yogurt shoppers is at least Finest Fresh Watching the Waistline Singles/ 1.75 times the incidence of Finest Fresh Foodie Couples that segment in the general Premium Watching the Waistline Families population. Meanwhile, Premium Watching the Waistline Singles/Couples Premium Healthy Living Families buyers of non-‐Greek yogurt Premium Families with Babies index under 100 for each of Finest-‐Focused Families Greek these segments. In total, Non-‐Greek Premium Healthy-‐Living Couples these segments represent over 40% of Greek yogurt households, versus 16% of non-‐Greek yogurt shoppers and 19% of the general population. Growth from Category Expansion or Brand Switching? Since it appeals to such a distinct set of consumers, we might conclude that the Greek segment is highly incremental to the category – consumers who previously didn’t buy yogurt are now buying Greek, or consumers who previously bought yogurt are now buying more and it’s in the form of Greek. We can explore this hypothesis by tracking household-‐level behavior over time. By measuring how each household changes its spending on each product, we can calculate whether sales growth to Greek yogurt is coming from new yogurt shoppers, existing yogurt shoppers spending more on the category and allocating that to Greek, or existing category shoppers switching-‐in from non-‐Greek brands. Sources of Greek Yogurt Growth This “Source of Volume” analysis confirms that most of Greek’s growth is indeed in the form of incremental Existing yogurt shoppers buying more yogurt, and category sales rather than just brand 8% allocating that growth to switching within the category. Greek Existing yogurt shoppers buying the same amount 37% Focus o n “ Brand Switchers” 55% of yogurt, but switching into Greek However, brand switching is a non-‐ New yogurt shoppers buying Greek negligible source of segment growth as well, accounting for 37% in the last year. Decomposing that volume into its
Source: Spire LLC, April 2012
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Source: Spire LLC, April 2012
Source: Spire LLC, April 2012
Total Food
YAGO
Current
$4,754
$4,747
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Source: Spire LLC, April 2012
% of Switching-‐In Dollars
pieces reveals what non-‐Greek brands are being “hit the hardest,” both in total dollars and on a fair-‐share basis. Unsurprisingly, the brand families losing the most to Greek in absolute terms are category giants Dannon and Yoplait, together contributing nearly 60% of all “Switching into Greek” dollars. But on a proportional basis, both those brands are Sources of Greek Yogurt Switching Growth contributing less than their share of the % of Switching-‐In Dollars Fair Share Index market in general, indicated by the fair -‐-‐850-‐-‐ share indices under 100. -‐-‐371-‐-‐ 30% 300 Upscale, Specialty Brands Hit the Hardest 20% 200 10% 100 When accounting for their size, organic / 0% 0 high-‐end brands such as Stonyfield, Breyers, and Brown Cow – have taken a much bigger blow. The same is true for specialty brands Weight Watchers and Yo Baby – again suggesting a link between Greek yogurt and households that are dieters and/or families with babies. Focus on “Category Expanders” But in the context of a weak economy and the resulting tradeoffs consumers must make, questions remain as to where the incremental spending is coming from for that majority of Greek yogurt growth that in fact does not come from switching. Leveraging Spire’s loyalty card database of 30 million households, we can answer the question, “Where does Greek yogurt growth come from when it’s NOT from non-‐ Greek brands and NOT from increased sales for Total Food?” Namely, we can identify a sample of shoppers who behaved in a way that focuses on that question. Within the Spire database, we can restrict to households who: 1) Did not change their Total Food spending (± 5%), 2) Did not change their non-‐Greek yogurt spending (± 5%), and 3) Did increase their Greek yogurt spending significantly (>30%) This resulting set of shoppers Focus Households' Average Spending by Segment, Cur Year vs Yago commands 3.08x its fair share of Greek-‐ $160 segment growth, and the average shopper in this set increased his/her $120 Greek-‐segment spending by over 200%, $46.92 $15.28 (even as the hurdle only required that $80 Greek they increase their Greek spending by Non-‐Greek $40 at least 30%). $75.56 $75.38 $0
Fair Share Index
This sample provides laser-‐like focus on those for whom nearly 100% of Greek volume growth sources from increased category sales, while none of it sources from increased Total Food sales. These households thus give us a good framework for understanding the broader implications of the Greek yogurt story within the retail landscape. Categories in Decline – (Oooh, Baby Baby) Given that these households were selected such that they did not change total food spending or non-‐Greek yogurt spending, we can infer that their increased spending in Greek yogurt is offset by a decrease in other categories. Exploring these categories gives us insight into both Greek yogurt usage and how this consumer is migrating through the store more generally. Interestingly, the categories declining the most among this group are in Baby – suggesting both usage of Greek yogurt for toddlers as well as a broader change in life stage among households increasing their engagement with Greek. Category (Shifting Away)
$ Sales per HH
YoY % Change ($)
Baby Formula
$3.67
-‐44.2%
Deli Soups
$0.78
-‐29.9%
Baby Care
$0.92
-‐27.3%
Diapers
$8.85
-‐24.8%
Baby Food
$7.04
-‐22.5%
Iced Tea Mixes
$2.80
-‐17.9%
Milk Modifiers
$3.50
-‐15.2%
Refrigerated Bread
$1.10
-‐14.7%
Dry Packaged Dinners
$5.18
-‐12.3%
Deli Pizza
$4.74
-‐12.3%
Toaster Pastries
$4.84
-‐11.3%
Dry Soup
$3.13
-‐9.6%
Deli Sides
$1.62
-‐8.6%
Fz Snacks
$6.28
-‐8.6%
Fz Convenience Meals
$42.85
-‐8.5%
Produce -‐ Value-‐Added Fruit
$23.20
-‐7.4%
Fruit Cups & Cans
$21.19
-‐6.5%
Deli Prepared Chicken
$21.33
-‐6.5%
Rfg RTE Desserts
$7.83
-‐6.5%
Meat -‐ Processed Lunch Meat
$26.15
-‐6.1%
Source: Spire LLC, April 2012 The 44% decrease in Baby Formula might suggest that mothers are feeding Greek yogurt to their toddlers, and are willing to pay a premium for the natural and nutritional alternatives. And while Greek yogurt is not a substitute for diapers, the 25% decline in Diapers spending is indicative of a change in child’s life stage. In
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keeping these trends, it’s worth noting that Stonyfield recently launched YoKids Greek, which is 70 cents more expensive than traditional YoKids. Accelerating the Move Away From Processed Foods Other declining segments include Deli Prepared, Convenience, and Snacking – for which Greek yogurt might be a replacement. A decline in Milk Modifiers, Iced Tea Mix, and Desserts, in turn, may suggest a desire to cut back on sugar. And with the exception of some fruit, all these items might be classified as “unhealthy” for the average consumer on a diet. Categories in Vogue – Bengay, Breakfast, and Balsamic On the flip side, we can look at what categories most increased among this set of shoppers as well, giving us insight into their broader motivations for shifting their budget into Greek yogurt. The results suggest that shifting to Greek yogurt corresponds with a broader effort to exercise, lose weight, and eat well. Category (Shifting Towards)
$ Sales per HH
YoY % Change ($)
Analgesics -‐ External
$1.21
41.7%
Other Breakfast
$3.48
28.5%
Ground Coffee
$50.31
27.8%
Nutritional & Weight Control
$12.68
17.3%
Fruit Snacks
$7.70
12.9%
Nuts & Seeds
$15.78
12.1%
Fz Fruit
$4.98
11.5%
Peanut Butter
$14.44
11.3%
Meat -‐ Meat Substitutes
$4.06
11.0%
Croutons & Salad Toppings
$3.31
10.7%
Deli Pre-‐Sliced Meat
$5.65
10.3%
Produce -‐ Dressings, Glazes, Marinades and Sauces
$3.92
9.4%
Eggs
$27.22
8.2%
Produce -‐ Nuts & Seeds
$12.73
7.6%
Vitamins & Supplements
$13.00
7.2%
Source: Spire LLC, April 2012 Categories benefiting from this shopper are often related to healthy living, including: external analgesics, breakfast items, diet and vitamin supplements, meat substitutes, salad accompaniments, etc. A number of them are also excellent sources of protein, suggesting another commonality with Greek yogurt. At the same time, increased spending on Kids items such as peanut butter and fruit snacks again suggests a correlation with a life stage change.
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Basket-‐ology One final consideration in understanding how Greek yogurt growth has impacted the total store is evaluating what other store categories tend to be purchased often with Greek yogurt. If Greek yogurt growth continues to surge, it stands to reason that these categories will benefit as well. % of Greek Yogurt Baskets
% of All Baskets
Index
Deli Dips/Spreads/Toppings
6%
1%
472
Egg Substitutes
6%
1%
421
Produce -‐ Avocados
6%
1%
416
Cottage Cheese
7%
2%
414
Produce -‐ Dried Fruits and Snack Mixes
3%
1%
411
Produce -‐ Pears
5%
1%
406
Produce -‐ Specialty Fruits
3%
1%
391
Produce -‐ Berries
20%
5%
377
Deli Specialty Cheese
11%
3%
377
Snack & Granola Bars
10%
3%
349
Rfg RTE Desserts
4%
1%
347
Produce -‐ Apples
18%
5%
341
Produce -‐ Value-‐Added Vegetables
7%
2%
336
Nutritional & Weight Control
3%
1%
335
Produce -‐ Squash/Pumpkins
5%
1%
334
Produce -‐ Mushrooms
7%
2%
329
Produce -‐ Nuts & Seeds
4%
1%
323
Produce -‐ Herbs, Spices and Seasonings
9%
3%
319
Produce -‐ Stone Fruits
7%
2%
315
Produce -‐ Cucumbers
11%
Affinity Category
4%
309
Source: Spire LLC, April 2012 We’ve seen this movie before: purchasing Greek yogurt (even for all Greek yogurt baskets, not just those earlier “focus” households) corresponds strongly with fruits, vegetables, health & wellness, and convenience. The shopper is on a broader trip mission than just “Yogurt” or just “Dairy.”
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Conclusion The explosive growth in Greek yogurt sales has been remarkable, especially in a well-‐developed “staple” category dominated by just a few brands. The Greek yogurt buyer is a distinct and valuable segment, and segments over-‐ represented among Greek yogurt buyers include those flagged as “Watching the Waistline,” “Healthy Living,” and “Natural / Organic” based on total-‐store purchasing. For those switching into Greek yogurt from non-‐Greek brands, diet, high-‐end, and organic brands are taking the biggest hit relative to their size. For those who source all of their increased Greek yogurt spending from other categories, consumer motivations appear to range from weight loss to convenience to toddler nutrition. Meanwhile, life stage change appears to be a key driver as well, evidenced by the falling sales in categories such as diapers and rising sales in ones such as fruit snacks. On an individual trip, the Greek yogurt basket tends to also contain produce and health & wellness items, solidifying evidence of Greek yogurt’s position as a wholesome choice in the consumer’s mind. Perhaps the most astounding aspect of this story is that this growth is in a premium-‐ priced segment despite an anemic economy. According to Nielsen, Greek yogurt accounts for roughly 25% of U.S. dollar sales, but only 15% of unit sales. Once consumers begin having more disposable income, look for Greek yogurt to continue shaping the shopper’s purchasing behavior, both within and beyond the category. For more information on this or other shopper intelligence topics, please visit www.spirenow.com or contact us by email at [email protected] or by phone at 203.916.1780.
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Appendix Essence™ shopper segments (1 of 2) Healthy Living Couples
Healthy Living Families
Premium On-‐the-‐Go
Watching the Waistline Singles/Couples
Watching the Waistline Families
Finest-‐ Focused Couples & Families
Low-‐ Cooking Singles
Quick Cooking Families
Finest Fresh Foodie Couples
Premium Healthy Living Families
Premium On-‐the-‐Go Couples
Finest Fresh Watching the Waistline HHs
Premium Watching the Waistline Families
Finest-‐ Focused HHs
Quick-‐ Cooking Singles
On-‐the-‐Go Quick-‐ Cooking Families
Premium Healthy-‐ Living Couples
Eating Right On-‐ the-‐Go Families
Premium On-‐the-‐Go Families
Premium Watching the Waistline HHs
On-‐the-‐Go Watching the Waistline Families
Finest-‐ Focused Families
Value Quick-‐ Cooking Singles
On-‐the-‐Go Value Quick-‐ Cooking Families
Healthy Living Couples
Eating Right Value Families
On-‐the-‐Go Watching the Waistline HHs
Eating Right Value Couples
Essence™ shopper segments (2 of 2) Meat & Potatoes Couples
Meat & Potatoes Families
Families with Babies
Kid-‐ Focused Families
Older Adults
Natural/Organic HHs
Hispanic HHs
Kosher HHs
Sunday Dinner Couples
Value Meat & Potatoes Families
Premium Families with Babies
Premium Healthy Kid-‐ Focused Families
Healthy Living Older Adults
Natural & Organic Couples
Hispanic Couples
Kosher Couples
Value Meat & Potatoes Couples
Meat & Potatoes Families
Young Families with Babies
Kid-‐ Focused Families
Quick Convenience Older Adults
Natural & Organic Families
Hispanic Young Families
Kosher Families
Value Young Families with Babies
Value Kid-‐ Focused Families
Value Older Adults
Hispanic Kid-‐ Focused Families
Source: Spire LLC, April 2012
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