Yogurt Industry

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Yoghurt and Sour Milk Products in Canada
Category Briefing | 04 Dec 2012
HEADLINES

* Yoghurt and sour milk products increases by 8% in current value terms to reach C$2.6 billion in 2012 * Greek yoghurt sweeps the nation, with its strong profile of healthy attributes * Pro/prebiotic drinking yoghurt records the highest current value growth in 2012 * Danone Canada leads yoghurt and sour milk products with a 35% value share in 2012 * Yoghurt and sour milk products is projected to increase by a constant value CAGR of 4% to reach C$3.2 billion in 2017

TRENDS
* Yoghurt and sour milk products is expected to be the most active dairy category in 2012, thanks to aggressive marketing and product development activities which took place in recent months. According to a recent interview given by Danone Canada, which was published in the February 2012 issue of the Canadian Grocer magazine, the yoghurt market in particular evolved significantly in the last decade. First, per capita consumption in Canada doubled in the 2000s, with Canadians now eating, on average, 11kg of yoghurt each year. Also, the category saw an increase in the number of trips shoppers make to buy yoghurt, from 12 to 16 trips per year. Lastly, these shoppers are buying more yoghurt than ever before, trading up to 12-packs from 8-packs of yoghurt. Much of this growth stemmed from rising consumer interest in a product which serves a wide range of health benefits (such as probiotics, calcium, protein) in various formats and flavours, whilst also catering to their desire for convenience. Continuous innovation in response to consumers’ needs further boosted its popularity. In 2012, current value sales of yoghurt are set to increase by 8% to reach C$2.6 billion. * Spoonable yoghurt continues to account for the largest share of retail value sales; set to reach C$2.3 billion in 2012. The category is expected, once again, to outperform drinking yoghurt, recording an 8% increase, thanks to the recent innovation of Greek yoghurt. * In what is now known as the “Greek effect”, Greek yoghurt has attracted significant attention across Canada. According to the February 2012 issue of Canadian Grocer, the innovative yoghurt accounted for 25% of new yoghurt launches in North America in 2011; a huge jump from 8% in 2009. Although the “Greek effect” began in the US, it quickly spilled over into the Canadian market, with some of the country’s leading producers launching their own lines of Greek yoghurt, such as Danone Canada’s Oikos brand. The success of Greek yoghurt has so far been based on its health attributes (high in protein) and creamier texture. * However, the success of Greek yoghurt in Canada has not been as smooth as it may have been in the US. Chobani, a top-selling yoghurt in the US, with a 19% market share (according to Financial Post’s estimate), sought to enjoy the same level of success it had south of the border by entering the Canadian market through a one-year test market import permit (obtained from Canada’s Minister of International Trade) in November 2011. However, shortly after it began selling its black cherry, strawberry, peach, plain and pomegranate flavours at 65 Loblaws stores in greater Toronto and Hamilton, its expansion plan was halted by competing domestic manufacturers such as Danone, and Yoplait’s Ultima Foods. These companies filed court applications to have the import permit struck down, arguing that Chobani’s operation does not work within the boundaries of Canada’s highly regulated supply management. In August 2012, the Federal Court of Canada ruled in favour of Chobani, upholding the ministerial permit that temporarily allows the Greek yoghurt brand to be imported into Canada and sold in the Toronto area. * Fruited spoonable yoghurt continues to lead sales growth; expected to record a 9% current value increase to reach C$1.7 billion in 2012. Capitalising on the widely-held perception that...
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