Strategic advice for the food and beverage industry

Vegetable yoghurt set to create a new niche

bh_groupAs it looked to find a way into the snack yoghurt market, US-based Blue Hill (see detailed Case Study in March New Nutrition Business) chose to create a new and innovative product type instead of simply following the current fad of “going Greek”.

At the moment “Will it be the next Greek?” seems to be the most-asked question of dairy innovations. This is of course the wrong question. No-one predicted the massive success of Greek yoghurt in the US back in 2007. And the owners of Greek yoghurt pioneer Chobani were probably as surprised as anyone.

Blue Hill’s vegetable yoghurts – they contain 30% vegetable puree – will not be “the next Greek”. And selling at a 75% premium to Greek yoghurt (itself a premium-priced product) they are not ready to race into the mass market.

But vegetable yoghurt does have the potential to be a significant niche – but achieving that is strictly dependent on delivering good taste.

The lesson from the juice market is that you make vegetables “work” as an ingredient when you make them taste of fruit (or at least taste sweet). Campbells V8 vegetable juice brand, for example, enjoyed one of its greatest growth periods when it launched an extension called Fusion – which was based on vegetables and fruit but tasted only of fruit.

In common with other smart, entrepreneurial start-ups, Blue Hill understands that getting the right distribution is key to the success of innovative products. That means in fact avoiding mass market supermarket distribution and instead launching in city centre stores in major urban areas and health food stores. Hence Blue Hill is debuting only in 100 Whole Food Markets (America’s premium natural foods supermarket chain).

Many big dairy groups have in the past evaluated vegetable yoghurts and dismissed the idea as “too innovative” or “too risky” because it involves educating consumers rather than connecting to an established consumer need. If Blue Hill can sustain itself beyond the launch period, some of them will look at it afresh. And it’s taste, not health, that will govern whether vegetable yoghurts have a future.

Posted in Editorial, Mainsite

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