Chobani New Product Development | Newhouse Advertising Graduate Program


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Chobani New Product Development | Newhouse Advertising Graduate Program

  1. 1. New Product PitchChobaniSoHoLight and healthy, yogurt is a staple in diets aroundthe world, and while Greek yogurt has beenavailable in Europe since the 1980s, it has onlygained traction in the United States since 2009.Exploding into a $1B company in a very shortamount of time, Chobani’s understanding of themarket in which it dominates is relatively shallowgiven the size of its brand. Any nugget of actionablewisdom that our agency provides to Chobani is ofimmediate value, and this report is a goldmine.
  2. 2. Over the last five years, the yogurt category has been heating up with no risk ofcurdling. Retail sales of yogurt category grew 7.5% in 2011 and the category isforecasted to grow an additional 9% in 2012 (Mintel’s Yogurt and Yogurt Drinks,2012). Growth in the category is driven primarily by demand for Greek yogurts, ofwhich Chobani is the clear market leader, holding 50% of the market share in theGreek category and 17% of the overall yogurt segment, more than double itsclosest competitor, Yoplait (Chobani Takes Gold in the Yogurt Aisle, 2012).Growing with no plateau in sight, Greek-style yogurt’s sales are expected todouble in 2012. To meet this demand, Chobani’s 80,000 square foot facilityproduces 1.2 million cases of Greek yogurt each week, with 32 SKUs in a varietyof flavors and sizes, operating multiple production lines running around the clock,and staffing 670 employees in three full-time shifts (Small Business Administration,2012).The recipe for Chobani is thicker, creamer, higher in protein, and lower in fat thannormal yogurt. It includes no preservatives or artificial flavors. These attributes arecommon among other competitors in the Greek yogurt space due to themanufacturing process (strained in cheesecloth) of Greek-style yogurt, andChobani is pre-dated in the Greek yogurt category by Fage, a yogurt manufacturerfounded in 1926 and headquartered in Athens, Greece. Fage yogurt has beenpopular in Europe since 1981, but Chobani was the first Greek yogurt to seekEXECUTIVE SUMMARY1. The yogurt category has grown for fiveyears straight and is expected to growanother 9% in 2012.2. Greek yogurt is fueling category growth,with sales expected to double in 2012.3. Chobani holds 50% of the market share inthe Greek yogurt category.4. Threats are numerous in the highly-competitive category which is receivingwidespread attention from iconic brands inthe category.5. Chobani is the highest-priced product inthe highest-priced niche of the yogurtcategory, but is it just a fad?Situation Analysis1
  3. 3. mass distribution channels via the yogurt section in grocerystores and supermarkets. This placement allowed the Chobanibrand to be marketed to a wider consumer base. Since theexplosion of Chobani, all competitors’ Greek yogurts havereceived facings in major supermarkets alongside Chobani, andstores like Wegmans have begun introducing store-brand Greekyogurt at a lower price point than Chobani, creating an extremelycompetitive yogurt marketplace.The price point of Chobani varies widely between stores, with a 6oz. single-serving cup ranging from $0.99 to $1.49 depending onthe supermarket. Other brands of Greek yogurt are pricedsimilarly. Typically, store brands of Greek yogurt are priced atabout $0.10 lower than Chobani.The entire category of Greek yogurt is priced slightly higher thannon-Greek yogurts. During qualitative research, a number ofrespondents classified Greek yogurt as a meal replacement whileidentifying non-Greek yogurt as a snack, due to Greek’s moresubstantial, more filling formulation. Coupled with its status as aBetter-For-You (BFY) food, consumers are willing to pay up totwice as much for Greek yogurt.Within the Greek category, price points vary as well, with Chobanipriced in most locations as the most expensive Greek yogurt,even though most competitors offer the same health benefits.What competitors lack, however, is Chobani’s positioning as adesigner-label yogurt, which justifies its higher price compared tosimilar products in the category. During qualitative research, weuncovered a number of insights regarding the social statusattached to the consumption of Chobani.As the highest-priced product in the highest-priced niche of theyogurt category, Chobani’s newfound position as the marketleader is anything but unassailable.• Market-dominant position• Designer-label status• Healthier than non-Greek• Great mid-afternoon snack• High rate of fanaticism• Strong desire to innovate• Potentially a fad• Higher price• Not made in Greece• High in sugar• Hard to eat on-the-go• Yogurt category growth• Greek category growth• Healthy eating trend• Intense competition• Low category brand loyalty2S WO T
  4. 4. To identify the primary motivations behind Chobani purchase decisions, weconducted twelve focus group sessions with a total of 48 participants. Allrespondents were self-selected, yogurt-consuming Newhouse Advertisingundergraduates between the ages of 18 and 22. In exchange for participating inthe focus groups, participants were given extra credit in either ADV 206 or ADV307.During the focus group, participants engaged in a variety of tasks, includingsurveys, direct questions, taste testing, creation of collages, word associations,picture sorts, packaging design, and ad creation.Analysis of the results focused on product usage and consumption habits,attitudes toward the brand and category, brand associations, product-specificpros and cons, packaging improvements, pricing strategy, and purchase behavior.Attitudes Toward YogurtYogurt is primarily consumed as an early or mid-morning snack expected toprovide fuel and stave off hunger between one and two hours. Taste is a leadingdriver of brand preference. The majority of respondents were moderate yogurteaters with moderate brand preference and low brand loyalty. Because ourrespondents were not brand-loyalists, accessibility was the most importantconsideration; most were okay eating whichever brand was readily available.EXECUTIVE SUMMARY1. We conducted twelve focus groups deeplyanalyzing the preferences and attitudes ofundergraduates at Syracuse University.2. Key insights were uncovered in thefollowing areas:1. Product usage2. Purchase behavior3. Packaging considerations3. Research-driven problems were identifiedand actionable solutions recommended.Primary Research3
  5. 5. Attitudes Toward ChobaniChobani was regularly referred to as a healthier, more natural, andmore upscale version of traditional yogurt. Many respondentsidentified Chobani as a regular part of a balanced breakfast,providing vitamins and aiding in digestion.Brand AssociationsAwareness of Yoplait and Dannon were at 100%, with a numberof respondents preferring either brand over Chobani, of whichabout three-fourths of participants were aware. Of the brandscompared, Fage had the lowest level of consumer awareness,often with less than one-fourth of participants recognizing thebrand. No participants were able to associate a clear brandidentity with Fage. Yoplait was seen primarily as female-targeteddieting food, and Dannon was strongly associated with children.Product-Specific AnalysisPlain yogurt was rejected by most participants, citing the fact thatthe flavor was unpalatable. One respondent suggested addingartificial sweetener to the Plain variety to make it a healthier snackthan fruit flavors, which health-conscious respondents regularlyrejected. Texture was a polarizing issue for respondents, with anequal number of participants responding positively and negativelyto the thicker, chunkier texture. All participants vigorously stirredChobani before consumption, and most cited the inert separationof liquids in the product from factory-to-table as the biggesthurdle to having the perfect yogurt.Packaging AnalysisRespondents were most concerned with the packaging as ahinderance to consumption on-the-go. One respondent statedthat he was uncomfortable throwing the yogurt in his bag for fearthat the thin fail would be ruptured by other objects in the bag.Others cited the odd shape and size of the single-serving cups asnegatives, since the required vigorous stirring forces theconsumer to be seated to avoid spilling the product.Pricing StrategyWe determined that the price a yogurt eater would be willing topay for Chobani differed depending on whether or not theyintended to eat Chobani often. The average price willing to bepaid by light eaters was higher than that willing to be paid byheavy eaters, by a factor of almost 2:1. Heavy eaters demandChobani at costs under $2, while light eaters would pay anaverage of $3.50 for a single serving of Chobani.Purchase Behavior AnalysisRespondents exceedingly reported that their purchase decisionwas made in the yogurt aisle. Very few reported specificallywriting any brand name on a shopping list, instead preferring toapproach the decision with several brands in mind and make thefinal selection after comparing availability and price at the store.4
  6. 6. Insight #1: Product UsageMost people eat Chobani for breakfast. It’s typically eaten aloneor mixed with a cereal or granola. When a consumer is activelydieting, Chobani is often substituted for a meal, but for non-dieters, this is rarely the case. Health fanatics and heavy yogurteaters often prefer plain Chobani over fruity Chobani due to thehigh sugar content of the fruits, but the vast majority ofrespondents had issues with the flavor of plain Chobani, calling ittoo tart. One dieting respondent adds artificial sweetener to plainChobani for a tasty, healthy treat. A sugar-free flavored yogurtwould be very popular among dieters.Insight #2: Purchase BehaviorThe vast majority of the purchase decision is made at the storeshelves. Most respondents do not list their brand name whenmaking a grocery list, instead writing “yogurt.” An interestingbehavior emerges among a sizable segment of the health-conscious population. Many individuals pick up two differentkinds of yogurt and simultaneously flip them around to read andcompare the nutrition labels on the products. Currently, the rear ofthe Chobani package lacks clear brand cues. Adding immediatecalls to action including a see-through section of the containerthat allows the user to see the yogurt and a bolder statement ofthe company’s commitment to charity would sway manypurchasers at the point of decision.Insight #3: Packaging ConsiderationsChobani could increase purchase intent among a certain segmentof the population by creating a more portable variety, taller andthinner, sold in six or eight packs, with a thick spoon attached.The majority of respondents wish that single-serving Chobani waspackaged with a spoon and thicker lid. There seems to be anopportunity to build a plastic lid with a break-away spoon tomake Chobani more backpack-friendly by reducing the risk ofspills and increasing convenience.5
  7. 7. Based on our research, what Chobani needs is not another yogurt: its sales arealready growing exponentially, and any new product introduced into the yogurtcategory would be competing primarily with Chobani’s other products. WhatChobani really needs is to disrupt another industry while the success of the last isso fresh on the minds of consumers.In the course of our research, we discovered an insight:“I eat Greek yogurt as a meal replacement, but the onlyproblem is, it’s not enough to fill me up.”Even though many respondents reported that Chobani was more filling than otheryogurts, when pressed, they admitted that they were often still hungry afterwards.Chobani SoHo is an attempt to create a new category of yogurt: a mealreplacement yogurt, the existence of which, by juxtaposition, clearly positionstraditional Chobani yogurt as an important part of a meal, not the entire meal itself.If any company should have the mettle to create a new category of yogurt, itshould be the company that completely disrupted the yogurt category just threeyears ago.EXECUTIVE SUMMARY1. Chobani should introduce a line of savoryyogurts modeled after the offerings atChobani SoHo.2. Chobani SoHo will be positioned as anupscale meal replacement for lunch.3. Chobani SoHo will be priced at $5.99.4. The offerings should be made availableboth in the grocery store (packaged mealsection) as well as at kiosks or specializedvending machines in major metros.New Product Plan6
  8. 8. ProductWe have added a number of new things to the Chobani SoHoproduct to make it ready for distribution on store shelves.Chobani SoHo’s line currently includes a number of sweet yogurtsand two savory yogurt dishes (Sea Salt + Cracked Pepper,Cucumber + Olive Oil), so our initial release would focus only onthe savory yogurt lines as a better-for-you lunch option.Additionally, the product will be served in glass-bottom bowls,etched with the Chobani logo, with a twist-off plastic top whichcontains a matte-finish, thick plastic spoon (all recommendationstaken directly from qualitative research). All parts of the bowlshould be recyclable, but we expect that many customers willwash the bowls for reuse.Finally, we intend to include about 10oz of yogurt and addedingredients in each package rather than the 6oz provided atChobani SoHo or in Chobani’s existing product line.PriceChobani SoHo is positioned as a lunch, not a snack. Since theChobani name already conveys designer-brand status andcommands a higher price, we position the Chobani to-go mealreplacement lunch slightly higher than other pre-made lunches at$5.99. We contend that it is NOT simply an expensive version ofthe $0.99 single serving meal, but an independently brandedproduct with a different function than the single serve yogurt.PlaceSince Chobani SoHo’s primary promise is a convenient lunch,placement should aim to make purchasing the product asconvenient as possible.Located in the packaged meal section of the grocery store, theChobani SoHo product represents more than just a single-serveyogurt, it’s a true meal replacement.Franchised kiosks also provide a unique opportunity for bothplacement and promotion. Additional retail outlets like theflagship store in NYC could crop up in major metropolitan areasand business districts across the United States.Custom-made vending machines featuring Chobani SoHoproducts, placed in office buildings around the world, could offera healthy lunch to busy professionals who are not willing tosacrifice their health for a fast meal.PromotionThe SoHo NYC neighborhood provides for a unique promotionalmedium. Essentially, it’s a brand in itself, and Chobani can attachitself to the image of SoHo in an honest fashion because of itsflagship store located there. Because SoHo hosts a number ofartists in residence, Chobani would pair with a new artist eachmonth to redesign the Chobani SoHo lid in their own unique styleto further add to the brand’s designer-label equity.7
  9. 9. ObjectiveTo persuade urban females to replace a meal with ChobaniSoHo, our new savory yogurt meals.Target AudienceDanielle is a 28 year old from the suburbs of Chicago. Afterattending Indiana University and graduating with a degree inCommunications in 2006, she got a job as the Marketing Directorat a Web Development firm, where she works between fifty andsixty hours a week. Her office culture is relatively laid back, soshe often goes out for lunch, but when it gets busy, it gets reallybusy. In times like this, she needs a lunch she can bring andleave in her fridge at work to eat at her desk without worryingabout leaving the office for lunch or hitting the break room forunhealthy snacks.What do they currently believe?Yogurt is a very healthy snack, but by itself, it only provides twohours of energy, so it’s not substantial enough to be a meal.What do we want them to believe?Chobani SoHo is a substantial, healthy meal that won’t leave youfeeling heavy.Single Minded PropositionChobani SoHo is a true meal replacement, not just a snack.Reason to BelieveThe larger size of Chobani SoHo and the extra, healthyingredients will fill you up, add important antioxidants to yourdiet, and help you manage your weight. The savory flavors adddepth to the dish that makes it feel more like a meal than asingle-serve Chobani.Creative Brief8
  10. 10. Ad #1: Online (Banner Ad, 8:30a-10:30a) Ad #2: TVC (Morning TV News/Weather Integration)Advertisements9
  11. 11. The plan to introduce Chobani SoHo is the next logical step in the branddevelopment plan for Chobani. Their SoHo store serves as an excellent testmarket for new products, but they still position the SoHo line as a snack.During our research, we found that many people are consuming Greek yogurt forlunch, but it’s not really a satisfying lunch. It’s only a 6 oz portion. It’s really a bettersnack than it is a meal replacement. Let’s help people understand this andreposition Greek yogurt where it belongs, as a snack.Chobani SoHo provides a convenient, healthy lunch, a huge motivator for foodchoice behaviors among our target audience. We believe that Chobani’sconsumers would absolutely buy Chobani SoHo while on the go, and many wouldeven stock their mini-fridge at work with the product.If you would argue that this plan brings nothing new to Chobani, ask yourselfwhether they are serving 3.5oz of Chobani yogurt at the SoHo store as a snack oras a meal replacement. In fact, the idea that the SoHo line will be disruptive in theprepackaged meal category is of extraordinary value to Chobani. It would create anew category for yogurt as a meal replacement, something that has never beencreated before.EXECUTIVE SUMMARY1. They’re already in a position to launch.2. Position Chobani SoHo as a mealreplacement.3. Reposition Greek yogurt as a snack.4. Provide the most convenient healthy lunch.5. Create a new category for yogurt.Rationale10