Kraft Ends Athenos Greek-Yogurt Line, Exits Fast-Growing Space
April 12 2012 - 3:38PM
Dow Jones News
Kraft Foods Inc. (KFT) has discontinued its Athenos Greek
yogurt, a product that failed to gain traction in a fast-growing
category that has been dominated by brands such as Chobani.
Kraft stopped selling the product last month, with the company
deciding to shift resources to other Athenos-branded products such
as feta cheese, hummus, pita chips and spreadable cheese.
"Although we had a loyal following of Athenos Greek yogurt fans,
we have decided to refocus our effort on innovating new products
for the Athenos brand," Kraft spokeswoman Angela Wiggins said
Thursday.
Kraft didn't disclose the size of its Athenos Greek yogurt
business. Consumer Edge Research LLC analyst Robert Dickerson
estimated the brand had $15 million in sales over the past year, a
small part of Kraft's $54 billion in annual sales.
The decision highlights just how difficult it has been even for
deep-pocketed food companies such as Kraft to crack the
Greek-yogurt space, which has exploded on the scene in recent
years. Barely a blip in 2006, Greek-yogurt sales grew 64% in 2011
after growing at triple-digit percentage rates in each of the
previous three years, according to Euromonitor International Inc.
Greek yogurt now accounts for about 22% of the $7.2 billion market
for spoonable yogurt in the U.S.
The growth has been driven largely by Chobani, which is owned by
Agro Farma Inc. and which accounts for close to 60% of the
Greek-yogurt market. Chobani launched in 2005, churning out yogurt
in a former Kraft manufacturing facility. The company said
Chobani's annual sales are now about $700 million, with sales
growing at triple-digit percentage rates in recent years. General
Mills Inc.'s (GIS) Yoplait, by comparison, has about $1.5 billion
in total yogurt sales in the U.S. after more than 30 years.
The growth in the segment has come despite Greek yogurt being
priced at a 93% premium to non-Greek yogurt, according to Nielsen
& Co. Consumers, however, have been drawn to Greek yogurt
because of its thick texture, high protein and low fat.
Greek-owned Fage SA and Group Danone SA's (BN.FR, DANOY) Dannon
Oikos are jostling for the No. 2 spot in the Greek-yogurt segment,
while Yoplait continues to try to gain a foothold. General Mills
plans to outline its latest strategy to do so in June.
Private-label Greek yogurt from supermarket chains such as Kroger
Co. (KR) are also growing well, creating enough competition to
crowd Kraft out of the space.
Kraft launched Athenos Greek yogurt in late 2010, under an
existing label that already had cachet as a maker of
Mediterranean-style foods. It was Kraft's re-entry into the yogurt
category, which it exited in 2004 when it sold Breyers Fruit on the
Bottom and other brands.
Kraft even backed the Athenos Greek launch with television
advertisements in early 2011 around the time that Chobani and Fage
both launched their first national ad campaigns.
Kraft's share of the Greek yogurt market was 2% last summer,
according to Chicago-based research firm SymphonyIRI Group, shortly
before Dannon and Yoplait relaunched their Greek-yogurt brands to
try to catch up with Chobani and Fage. But Kraft's share has since
dwindled.
Kraft's remaining Athenos products are to become part of Kraft's
North American grocery business, Kraft Foods Group Inc., when the
company splits up later this year. Kraft's snack brands, such as
Oreo cookies and Trident gum, are going to be part of Mondelez
International Inc.
Ahead of its split-up, Kraft is pruning its product portfolio in
North America. It hasn't disclosed how many or which brands will be
discontinued, but the move is expected to hurt its sales this year
by up to two percentage points in North America and about one
percentage point for Kraft overall.
Kraft spokeswoman Wiggins said the decision to discontinue
Athenos Greek yogurt is separate from that plan to shed
products.
-By Paul Ziobro, Dow Jones Newswires; 212-416-2194;
paul.ziobro@dowjones.com
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