General Mills plans to unveil a new yogurt product Monday that executives hope disrupts the marketplace like Greek yogurt did a decade ago.
The ambition and stakes are high for the product, called Oui by Yoplait, which is a key part of the company’s turnaround plan for its bruised yogurt portfolio.
General Mills calls it a French-style yogurt, which uses a culturing process that is true to its Old World heritage but new to U.S. consumers.
“It’s been 10 years really since a new segment has emerged in yogurt and we think this is what our business and the category needs to get back to growth,” said David Clark, president of U.S. yogurt for General Mills.
Oui by Yoplait faces an uphill battle for consumers’ attention in a crowded dairy aisle.
For months, investors, analysts and media have hounded General Mills for proof its leadership has a viable plan to turn its yogurt sales from negative to positive. For each of the last four quarters, its U.S. yogurt sales by value have fallen in the 10 percent to 20 percent range. Company executives began alluding to Oui (without using its name) in February as proof of a road map.
“We can’t go out and tell our story until we are ready, so we have endured a lot of speculation, a lot of negative stories in the press, a lot of questions about what are we doing,” Clark said. “I’m just so pleased we are able to now come out and share the story about where we are going.”
Packaged in small glass pots, Oui is a product meant to appeal to the individual experience. It is made with fewer ingredients and ones that are non-GMO.
Clark says the manufacturing process is what sets French-style yogurt apart from other products all vying to be different on store shelves — be it Icelandic, Bulgarian or sheep’s milk yogurt. Oui is cultured in each individual pot rather than in large vats. The texture is thicker because the yogurt is not stirred or transferred after being heated and cultured. The sturdy glass pots mean that protein is not disturbed, and this entire process means stabilizers like cornstarch or gelatin are not needed.
The production cost is greater, leading to a suggested price of $1.49, slightly higher than most Greek yogurts.
General Mills has a history as a innovation leader in yogurt — being the first to blend fruit and yogurt, the first to put yogurt in a tube and the first to introduce a light yogurt for weight management. But its competitors drove the surge of Greek yogurt over the past decade.
Since then, the Golden Valley company’s yogurt innovations have been incremental, not market changing, and it lost market share to Dannon, Chobani and a swell of smaller brands.
Greek yogurt accounts for about 32 percent of all yogurt chosen by consumers, according to the latest data from NPD Group, a market research firm.
“That’s a quick jump up from almost nothing a decade ago to nearly a third of the market,” said Darren Seifer, NPD’s executive director and food industry analyst.
But consumption of yogurt, including Greek, has plateaued over the last four to five years, creating an opportunity for General Mills.
“Consumers aren’t excited about this category like they were a decade ago,” Seifer said, “I’ve been saying for a while, it looks as if it’s time for major innovation within the yogurt category.”
Yoplait started in France but General Mills has distributed it in the U.S. since 1977 and has owned a controlling stake in the brand since 2011.
Clark has led the U.S. yogurt division for just over three years. “I knew after my first year that we had a significant problem with this business,” he said.
With consumers wanting foods with simple ingredients made using natural processes, General Mills started working to create a product that consumers felt was honest.
Yoplait’s heritage is in France, he said, and so “this is really a great opportunity to create something truly authentic.”
French native Brice LeRoy, innovation product designer with General Mills’ international dairy group, was brought onto the Minneapolis-based Oui team to guide the effort. “It’s a very traditional yogurt in France,” LeRoy said. “It’s really celebrated.”
Clark and LeRoy’s team conducted extensive consumer research and found growing dissatisfaction with the somewhat sour taste of Greek yogurt. Both believe Oui offers the thick texture consumers love about Greek, but with a better taste and creamier texture.
General Mills is investing heavily behind the new product with a widespread marketing campaign planned across all channels, and in-store sampling and demos to hopefully reach scale quickly following its July 10 launch. The company added an entirely new production line at its Reed City, Mich., plant that required a campus expansion. Clark declined to reveal how much the company spent but said the investment was significant.
Even if this new product is truly innovative, Seifer said, General Mills will have to work hard to get consumers’ attention. “It’s pretty crowded at the grocery store, so it’s very hard to get noticed,” Seifer said. “… Any new entrant will have a hard time no matter how innovative it is.”