Spotlight on Yogurt

Whether it is used as a substitute for mayonnaise or sour cream, as breakfast on the go or as an afternoon snack, yogurt is an increasingly popular staple among American households. Packaged Facts, a division of Rockville, Md.-based MarketResearch.com, estimates in its March 2013 report titled “Yogurt Market and Yogurt Innovation” that the U.S. market for yogurt sold at retail will hit $9.3 billion by 2017. While private label ranks No. 2 overall when it comes to market share of refrigerated yogurt, the reality is that the top three marketers of yogurt account for almost three-quarters of all yogurt sales in food, drug and mass channels. But retailers that use effective packaging and smart merchandising techniques could better capture the consumer’s attention and convince them to try store brand yogurt.

To see what retailers are doing well and not so well here, we visited three grocery stores in the Chicagoland area: a Whole Foods Market store operated by Austin, Texas-based Whole Foods Market Inc.; a Trader Joe’s store, operated by Monrovia, Calif.-based Trader Joe’s, and a The Fresh Market store operated by The Fresh Market Inc., Greensboro, N.C. Our visits took place on a Thursday afternoon in late July.

Whole Foods Market

General observations: The Whole Foods Market store’s yogurt products are centered on the back wall. They are merchandised in an open refrigerated case, and the yogurt section takes up about one-quarter of the entire case. Foot traffic was fairly heavy during our midweek lunchtime visit, with many customers browsing this section for both lunch and general shopping purposes.

Whole Foods offers yogurt under the 365 Everyday Value and 365 Everyday Value Organic store brand lines. We counted more than 20 different SKUs of store brand yogurt at this particular store.

The upside:

• ■ Even though none of the store brand yogurts were on sale the week we visited, the store still placed shelf tags underneath different SKUs. The tags called out “VALUE” in white capital letters against a red and yellow background to draw customers’ attention to the price difference between the store brand and the national brands.
• ■ The Whole Foods store offers a wide variety of flavors of own-brand single-serve yogurt cups. Flavors include honey, fig and date, blueberry pomegranate, mango, pineapple, raspberry and strawberry.
• ■ This section of the refrigerated case was very clean and organized.

The downside:

• ■ On the day we visited, two SKUs of store brand single-serve Greek yogurt cups were out of stock.
• ■ We could not find a store brand version of drinkable yogurt, yogurt pouches, baby/toddler yogurt or yogurt tubes.
• ■ We could not find any additional displays around the store merchandising either national brand or store brand yogurts.
• ■ We found Stonyfield Greek yogurt cups on promotion and priced below the regular price of the store brand Greek yogurt cups. The store did not price its Greek yogurt cups to match or beat the Stonyfield pricing.

Trader Joe’s

General observations: The Trader Joe’s store’s yogurt section is located on the back wall and to the left (when looking into the store from the front entrance). The yogurts are merchandised in an open refrigerated case, and the yogurt section takes up half of the case. Foot traffic was light to moderate during our midafternoon visit.

The store merchandises its yogurts under the Trader Joe’s store brand name and offers the largest variety and the largest number of SKUs of the three stores we visited. By our count, the store we visited sells more than 50 different SKUs of store brand yogurt.

The upside:

• ■ Not only does the store offer single-serve cups, but it also offers yogurt tubes, multipacks of yogurt and a variety of larger sizes, including 8 ounces, 16 ounces and 32 ounces.
• ■ Besides traditional and Greek-style yogurts, the store offers a vegan yogurt created from organic coconut milk, a goat milk yogurt, and a European-style yogurt that claimed to be smooth and creamy. This was also the only store we visited that sold any store brand drinkable yogurts.
• ■ The yogurt section was well-stocked; we didn’t see any out-of-stocks.

The downside:

• ■ Most of the refrigerated case was clean. But in one of the yogurt container sections, we noticed that a yogurt container must have broken open during shipment, as there was dried yogurt on multiple containers.
• ■ We could not find any additional displays around the store merchandising national brand or store brand yogurt.

The Fresh Market

General observations: The yogurt section is located all the way in the back of the store and to the left (when looking into the store from the front entrance). It takes up about one-third of the open refrigerated case. Foot traffic was light during our afternoon visit, and we counted a total of 12 SKUs of store brand yogurt.

The upside:

• ■ The section was well-stocked and clean; we noticed no out-of-stocks.
• ■ Store brand Greek nonfat yogurt cups were on promotion for five for $5; a shelf tag bore The Fresh Market logo and said, “The Fresh Market brand products: 100 percent satisfaction guarantee.”

The downside:

• ■ We could not find a store brand version of drinkable yogurt, yogurt pouches, baby/toddler yogurt or yogurt tubes.
• ■ We could not find any additional displays around the store merchandising national brand or store brand yogurt.
• ■ This store offers the fewest number of SKUs of store brand yogurts of the three stores we visited, and none of the SKUs are particularly innovative in terms of flavor or formulation.

Package and merchandise it to sell

When it comes to packaging, retailers might want to pay special attention to consumers’ interest in multipacks, says Doug Ricketts, director of retail sales for Buffalo, N.Y.-based Upstate Niagara. Consumers often buy multiple yogurts at one time, and multipacks could be a convenient time-saver for them that takes the hassle out of picking out multiple individual yogurts. As an added bonus, multipacks are a time saver for retailers since they need to shelve only one larger item rather that multiple single items.

Another innovation in packaging for retailers to consider is drinkable yogurt, says Pamela Zager, director of marketing for Alpina Foods, Batavia, N.Y. While consumers in their 30s and 40s were conditioned to eat yogurt with a spoon, today’s children are drinking yogurt out of a tube or bottle. As these children grow up, this trend will likely expand and grow with them, leading to more consumers drinking their yogurts rather than spooning them. Retailers might want to consider adding yogurt pouches, yogurt tubes or drinkable yogurts that are similar to smoothies to their store brand lines sooner rather than later.

And when it comes to merchandising store brand yogurts, placement is key, Ricketts says. It can be challenging for customers to find all of the items they want or need when the line has been fragmented among several shelves instead of kept in a row on one single shelf.

Additionally, in a space where national brands are so well-known, branding is incredibly important for private brands, Zager says. Retailers must create a branded product that will fit their consumer instead of relying on a “me too” product. To do so, they must conduct consumer research to understand what their consumers want from yogurt. This could mean conducting consumer research to supplement purchase data. They also must create a label that will be easily recognized and understood by the consumer, especially considering that consumers can see product colors on the shelf from up to 30 feet away. And retailers will want to avoid labels that are congested with words that could confuse the consumer or with an overwhelming design that will distract from the product’s key benefits.