Business Strategies / R&D / Processor of the Year

2012 Processor of the Year: Designing Greek Yogurt

Chobani's product development team balances simplicity with excitement.

By David Phillips, Technical Editor

In creating the top brand of Greek yogurt in the U.S., Chobani Inc. was called upon to walk a fine line between tradition and innovation.

Greek yogurt is a fairly simple product that offers a double dose of protein along with an all-natural appeal. The trick for Chobani was to take that fairly simple proposition and find a way to make yogurt cool.

"We give our yogurt a modern twist by creating new and exciting flavors," says John Heath, vice president of new ventures and innovations at the Norwich, N.Y.-based company.

"Philosophically speaking, we just try and keep our product simple and create varieties that make sense for yogurt – something that we might add ourselves at home to plain yogurt.

So, you won't find a cake flavor from Chobani. But you will find pure, simple flavors that are familiar to you but you may not have had in a traditional, Greek yogurt before."

Chobani is a nontraditional company, and so is its product development. Instead of an R&D department, Heath leads an innovations team that includes a small handful of innovations specialists, and also draws on resources from various others departments in the company.

Their work has been a key component of the remarkable success enjoyed by the Chobani brand, which was launched just five years ago. Chobani has become the largest single brand of yogurt in the U.S., with more than 1,700 employees, and is on track to sell $1 billion worth of Greek yogurt in 2012.

Keeping it real

Chobani Yogurt
With their white background and brightly colored lettering and fruit images, the packaging graphics reflect the wholesomeness of the milk and the excitement of the fruit flavors

What differentiates authentic Greek (also referred to as Mediterranean-style or, simply, strained) yogurt from the yogurt U.S. consumers are accustomed to is that it is strained, so that some of the liquid whey is removed. This produces a yogurt that is thicker -- without the use of starches and gums -- and higher in protein. Both of those attributes have caught the attention of Americans who are seeking more nutrients and fewer additives in their food products.

"It takes three pounds of milk to make one pound of Chobani, using an authentic straining processes," Heath notes. For other American yogurts, one pound of milk yields a pound of yogurt. "Essentially we are applying new technology to a traditional process. We use mechanical separation to replicate how people used to strain their yogurt hundreds of years ago in cloth bags."

A similar separation process is used on the pasteurized milk that is the basic ingredient of Chobani yogurt. All incoming milk is reduced to skim for processing. At the end, cream is added back in to create products in 2 percent milk fat, as well as a fat-free option.

That's the foundation of the product line. In addition to a Plain in each of the fat levels, there are a variety of flavors in nonfat and in lowfat. Some of these include Raspberry, Blood Orange and Honey in nonfat, along with Passion Fruit, Mango and Strawberry Banana in lowfat. Vanilla and Vanilla Chocolate Chunk are also in the mix. Blood Orange is joined by Lemon to make up the Citrus offerings.

Heath says the flavor offerings do not all have equal appeal to customers, with some big sellers and some that have more of a cult following.

"Like a lot of our Chobani flavors, citrus is polarizing – you either like it or you don't. And we love that actually. We've found that while an SKU like our Lemon is not a top-five flavor, those who buy our Lemon love our Lemon, and they're quite vocal when they can't find it."

We may not follow the typical category codes and flavor cues all the time, and we would never pursue flavors and products that we don't believe in. But we think you'll be surprised at what we can do with natural ingredients and a little ingenuity.

– John Heath, vice president of new ventures and innovations, Chobani

Citrus flavors present technical challenges as well, he says.

"From an R&D perspective, citrus is difficult to do well in a yogurt, and we're proud of the combinations we've put to market. Some flavors, like Lemon, are best when blended throughout the yogurt, and others, like Blood Orange, do well in a fruit-on-the-bottom cup."

Flavor comes first, as it does with any kind of food, but nutrition is awfully important for yogurt, which has always been positioned as a healthful food. In addition to that big dose of protein (18g per serving in Plain, 36 percent of the RDA), all the yogurts provide vitamins, 15-20 percent of the RDA for calcium, and live and active cultures including three probiotic strains. All Chobani products start with milk from cows not treated with rBST, the synthetic growth hormone. They are kosher, made without gelatin and animal-friendly. They are also 95 percent lactose-free, and in them you won't find any artificial flavors or colors or preservatives.

Single-serve Chobani products are packed in 6-oz. cups. Multi-serve 16-oz. packages are offered for seven blended flavors and in both fat levels of plain, along with 32-oz. bulk containers in Plain, Vanilla and Strawberry.

With their white background and brightly colored lettering and fruit images, the packaging graphics reflect the wholesomeness of the milk and the excitement of the fruit flavors. A large "0" or "2" character in the background indicates the fat level. The cups and tubs are lower and chubbier than most yogurt packaging used in the U.S.

"We took well over a year to design the very first package of Chobani. That should give you a good indication for how much regard we have for packaging and design at Chobani," Heath says. "When it comes to marketing and merchandising, we try not to seem like we are shouting, selling too hard or comparing ourselves to our competitors. We'd rather connect with our consumers.

"That's also the reason we've focused so much attention on our social media efforts," he continues. "Social media lends itself so well to caring for and sharing with our consumers. People want to do business with people they like, and in the end, our goal is to be more likeable and form a deeper emotional connection and trust with our fans."

Team Chobani

Not surprisingly, a young company such as Chobani takes a fresh approach to the process of product development. It is also an inclusive process involving employees from throughout the company, Heath says.

"We have a dedicated innovation department at Chobani. But we see innovation as an extremely collaborative function that involves many departments – from R&D and marketing to manufacturing and including social media and sales," Heath says. "To us, it's extremely important that we are all thinking about great ideas and how to best bring them to market.

"We function more like a tech company than a traditional CPG company. It's just the way we think. And thankfully it's the way we work."

As an example, Chobani does not rely heavily on focus groups and other consumer testing when floating an idea for a new product.

"We don't really test product ideas at Chobani in a traditional sense," Heath notes. "When we have a new idea or a new product we simply ask ourselves: ‘Would we want to see that in our own refrigerators? Would we be proud to serve it to our kids or our families?' If the answer is yes, we do it. It's as simple as that."

They are the Champions

In 2010, Chobani rolled out the first Greek yogurt developed specifically for kids. Chobani Champions is made from real fruit and all natural ingredients, and comes in four flavors: Orange Vanilla, Banana Honey, Very Berry and Vanilla Chocolate Chunk. It is made from skim milk and cream, and is designed to meet the specific nutritional needs of children, but providing a bit more fat.

The 3.5-oz. cup of Very Berry flavor, for instance, provides 100 calories (15 from fat), plus 8g protein, which is 15 percent of the RDA for children, along with 20 percent of the RDA for Vitamin D. It has the same five active cultures as the adult version.

"We love the Champions brand and the current product platform," Heath says. "To us, the sky is the limit with kids. They have incredible imaginations, so it raises the bar on what we need to do on the innovation side to keep them both happy and healthy. Like the rest of the Chobani platform, we will aim to keep things pure, simple and nutritious."

With its amazing success and low bureaucracy, it might be expected that Chobani might be resistant to changing the product line, but Heath says they know better. Some changes have already been made to the Champions line, and new flavors are never far off, he says.

"We may not follow the typical category codes and flavor cues all the time, and we would never pursue flavors and products that we don't believe in. But we think you'll be surprised at what we can do with natural ingredients and a little ingenuity. And we're excited to bring new product innovations to market next year for both Chobani and Champions."