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As Greek Yogurt Growth Slows, Chobani Turns To Sriracha

The company whose name has been synonymous with the boom in Greek yogurt sales is looking at new savory-spicy frontiers as the market matures.

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Does sriracha have any business as a Greek yogurt flavoring? Or chipotle? How about its spicy cousin, jalapeño? Chobani thinks the answer to all these questions is "yes."

The Greek yogurt maker is preparing to launch a new line of flavors at the start of 2016, all aimed at getting people eating more yogurt throughout the day. After years of skyrocketing growth, sales of Greek yogurt are finally starting to settle down, meaning Chobani needs to work harder than ever to keep growing.

Among its new offerings is a new Sriracha Mango yogurt — although that description alone is oversimplified. It is part of Chobani's "Flip" line, introduced in 2013 and now the country's leading "mix in" yogurt brand. Half of the square container is filled with mango yogurt. The other half, separated diagonally into what the company calls the "sidecar," are the toppings: sriracha roasted rice crisps, mini sesame sticks, and salted cashews. When you fold the container in half along the diagonal, the crunchy toppings tumble from the sidecar onto the yogurt.

"We think these sweet and spicy things are very interesting. Very interesting," Chobani's Chief Marketing and Brand Officer Peter McGuinness said to me as I noshed on a generous spoonful of the new yogurt. Sriracha Mango, along with the new Chipotle Pineapple, are Chobani's first sweet and spicy flavors. Others, such as jalapeño, are in the works.

The new products are are one avenue to overcome a slowdown in Greek yogurt, which is still outperforming non-Greek varieties, but slowed from double digit percent increases in recent years to 5.5% in the 52 weeks ending Nov. 21, according to Nielsen.

The company is preparing to launch the Sriracha Mango and Chipotle Pineapple flavors, and 14 other new products, at the start of 2016. There's a Peanut Butter and Jelly flavored Flip, five light Greek yogurt varieties, two new whole milk options, and limited-edition flavors like a Peppermint Flip, Apple Cinnamon, and Maple.

This would bring the total number of new products launched by Chobani since mid-2015 to more than 30, which McGuinness said “feels right.”

“Our velocities and our performance merits it,” he said. Chobani's monthly dollar sales rose 18% year-on-year in November, according to Nielsen data, and the company expects 2015 sales to increase 11% for the year.

While unit sales of all yogurt were about flat last year, manufacturers were adding many new varieties. The pattern suggested the market was becoming saturated. Last week, PepsiCo announced that, due to weak sales, it was ending its joint-venture with Müller — a German brand of Greek and regular yogurt — and the brand will no longer be in production in the U.S. The decision reflects the challenges in this industry; it also shows Chobani was able to stay ahead of this particular competitor.

Chobani's strategy, as it has been for some time, has been to get more Americans to eat Greek yogurt, either as a breakfast food, afternoon snack, dessert, or as a cooking ingredient, such as a replacement for sour cream. That means more launches. "You can put a dollop of it in chili, a dollop in a fajita, a dollop on a baked potato instead of sour cream. I'm not picking on sour cream but it’s got no reason for being anymore," said McGuinness.

Even at this point, McGuinness said, about 60% of the country has never had a Greek yogurt and about two-thirds of the country has never heard of Chobani, leaving plenty of room yet to grow, he estimates.

Which brings us to sriracha, a trendy, savory flavor intended to usher Greek yogurt into Americans' afternoon snacking habits. "Sriracha is a huge thing. Look at QSR [quick service restaurants], at fast food, at chips," said McGuinness. The Sriracha Mango flavor is "kind of sweet, salty, spicy. So it’s not overly spicy, because we want to ease people in."

Truth is, the Sriracha Mango is not so much hot as it is savory and sweet. Dehydrated garlic is one of the ingredients, and it's an unexpected but welcome taste. The rice crisps add a crunch that is softer than you'd get with other toppings like nuts, seeds, or granola.

What it does clearly reflect is the continued potential Chobani sees in its Flip line, which the company says has seen sales triple year-on-year every month in the second half of 2015 . “We think it’s the next B,” said McGuinness, meaning "billion-dollar platform." “We’re just getting started.”

Venessa Wong is a business reporter for BuzzFeed News and is based in New York. Wong covers the food industry.

Contact Venessa Wong at venessa.wong@buzzfeed.com.

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