Chobani, the maker of Greek yogurt in upstate New York, thinks that the Greek yogurt trend has just gotten started.
Its plant already pumps out 1.5 million cases of the thick yogurt every week, and pallets are stacked four stories high in the chilled warehouse. But like other Greek yogurt makers, Chobani is expanding.
Greek yogurt now accounts for a quarter of the total yogurt market after a dizzying growth spurt that is especially apparent here in the heart of upstate New York. The nation’s No. 1 and No. 2 Greek yogurt brands — Chobani and Fage, respectively — are both expanding plants within 60 miles of each other, and another company is building a plant in western New York. The expansions come as the big U.S. yogurt makers are focusing on Greek products, too.
While the quick growth has some hallmarks of a food fad — think cupcakes or bubble tea — the long-term investments point to a widespread industry belief that many Americans will continue to like their yogurt a bit richer.
“I personally do not believe that the yogurt story has started yet. I believe the yogurt story in this country is about to start,” Chobani’s founder, Hamdi Ulukaya, said during an interview in his office. “The magnitude hasn’t started yet.”
The company said production will increase from 1.5 million cases a week to more than 2 million when the current $134 million expansion is completed this year. Another $128 million Chobani plant being built 2,000 miles west in Twins Falls, Idaho, will add still more.
About 60 miles northeast, the Greek company Fage (pronounced FA’-yeh) is in the early stages of doubling the capacity of its 3-year-old plant in Johnstown, N.Y. to about 160,000 tons of yogurt annually.
The NPD Group, a consumer marketing research firm, reports that Greek yogurt appeals most to adult females and that it’s more popular in smaller and higher-income households.
“I think that you’re going to see a very high level of innovation in the yogurt category generally and in Greek yogurt specifically over the next 6 to 12 months,” General Mills chief executive officer Kendall J. Powell told a conference call with analysts last month.
Source: Copyright 2012 Associated Press, Wall Street Journal