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17-Sep-2012

Yoghurt's big move down under

 
A LEADING United States yoghurt brand is hedging its bets on the Australian market.  
Last year, Chobani acquired the Gippsland-based dairy manufacturer Bead Foods, investing $30 million towards a new yoghurt factory in Dandenong.  
 
Peter Meek, who is heading up the operation in Australia, expects the move down under to have a positive impact on the local dairy industry.  
 
It's been 12 months since Chobani's factory at Dandenong was upscaled, with the company's Greek yoghurt now stocked in every major Woolworths across the country.  
 
And according to Mr Meek, consumer feedback on the Greek yoghurt has been encouraging.  
 
It comes as no surprise to him, especially after the success of the brand across the US.  
 
President and founder of Chobani, Hamdi Ulukaya, went out on a whim in 2005 to buy an old Kraft factory in New York.  
 
It took more than a year to fine-tune the Chobani recipe, and five years to break into the US yoghurt market and become a $750 million business.  
 
Mr Ulukaya's passion has seen the company grab 50 per cent of the US Greek yoghurt market share.  
 
Back on Australian shores, Mr Meek, who joined the business in December last year, is crossing his fingers that success will continue.  
 
Bead Foods, who also make the organically certified Gippsland Yoghurt, currently use 10,000 litres of milk.  
 
By October, he says the new Chobani factory will be fully operational, with the capacity expanding to 30,000l.  
 
The milk is purchased from a wholesaler and sourced from Victorian dairy farms.  
 
But with so many yoghurt brands on the market, will Chobani find it easy to gain market share in Australia?  
 
"At the moment, along with our Gippsland brands, we already hold about 8pc of the market share," he said.  
 
"But for us it's not about that. The brand's success has been established because of people discovering the product and liking it - and then passing that information forward.  
 
"In the US, it was the number one brand, before any advertising money was spent.  
 
"It was very much a grass-roots, word-of-mouth marketing approach."  
 
He said Chobani's point of difference was the fact it was a 'strained' yoghurt.  
 
It actually uses three times as much milk to make the product, compared to other yoghurt varieties.  
 
"We remove a lot of moisture and a lot of the lactose in the process, what we end up with is something that is naturally thick and creamy, incredibly high in protein, but low in fat," Mr Meek said.  
 
He says Chobani is the only strained yoghurt on the Australian market.  
 
"We are really hoping that consumers take to the brand here," he said.  
 
"If more people like it, that will mean we can take more milk."  
 
He said this would be good news for the local dairy industry.  
 
And while the company's marketing plan is based around sampling and 'word-of-mouth' tactics, Mr Meek says Chobani are heavily focused on social media.  
 
"We have nearly 600,000 Facebook fans and that's a critical medium to us," he said.  
 
On Twitter, 45,000 people follow the company's tweets.  
 
It is not the only yoghurt brand in Australia to take advantage of social media, with the Gippsland-based 'five: am' yoghurt also finding success on Facebook, and turning that into sales.  
 
While it is difficult to grow milk consumption, it is expected Chobani will benefit from the recent rise in yoghurt consumption here. Australians currently eat 7kg of yoghurt annually, according to Dairy Australia. And Roy Morgan research this year revealed 70pc of Australians (13.3 million people) aged 14 or over consumed some kind of yoghurt in the past 12 months.  
 
And at a time when other dairy manufacturers are shedding their workforces, Mr Meek said the Chobani factory will employ up to 50 people.  
 
He was reluctant to comment on the effect of the supermarket pricing wars on the industry, but did say the company were focused on building a strong company.  
 
"From my perspective, we need a strong and vibrant dairy community to prosper," he said.  
 
But with the possibility of the major supermarkets slashing the price of their generic yoghurt in a similar fashion to the $1 milk, Mr Meek said he welcomed competition.  
 
"There are already private label brands out there, but we are aiming for a different market," he said. "We've got a unique brand, so I think we'll be fine," he said.  
 
It is the first time Chobani have expanded their yoghurt manufacturing to another country, however attempts have been made to enter Canada.  
 
According to reports on CBC News' Ottawa website, the US yogurt manufacturer's bid to enter the Canadian market stirred up the local dairy industry.  
 
It reported that Agra-Farma Canada received import permits last year to market and sell in the Toronto area its Chobani yogurt, with the company striking a deal with farmers to obtain a supply of milk and obtained import permits until they could get a plant in up and running.  
 
Ottawa dairy farmer Peter Ruiter encouraged the move, saying anytime more milk was needed was a great news story.  
 
"Milk is a mature product, people generally don't drink more milk on a whim," he told the website.  
 
But major yoghurt competitors had tried to block the move, saying the product was not unique enough to warrant entry into the market.  
 
Canada's national supply management system means Ontario cannot exceed its percentage of the pool, so handling new entrants who want to access that pool of available milk can pose problems, the website said.  
 
Stock and Land  
 
Source: http://www.stockandland.com.au  

 

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