Chobani Rejects PepsiCo's Bid for Stake in Greek Yogurt Giant
Widespread interest in Chobani minority stake indicates Greek yogurt still prominent in U.S. food market
Chobani recently announced its decision to reject offers from beverage industry mainstay PepsiCo and other investors for a stake in the company. Several parties propositioned Chobani in 2015, and the company opted to work with Goldman Sachs to mull over the potential sale.
The deal collapsed when PepsiCo insisted on purchasing a majority stake instead of the minority stake the yogurt maker preferred. While it remains to be seen what potential deals lie ahead for Chobani in the future, one thing is clear: the brand's primary objective is to retain its independence. Other companies that have expressed interest in Chobani include organic foods producer White Wave Foods and even PepsiCo rival Coca-Cola, who eventually ended its pursuit last October.
As arguably the best known Greek yogurt brand, the extensive outside interest is understandable, according to market research publisher Packaged Facts, which published the report The Yogurt Market and Yogurt Innovation, 2nd Edition in 2015.
"Chobani has led the Greek yogurt revolution. The company owned an overwhelming majority of the market just a few years ago. Chobani remains the industry's crème de la crème even as competitors have fought tooth and nail for market share. To an extent Dannon has closed the gap across its portfolio of Greek brands. And other marketers such Yoplait, Muller Quaker Dairy and YoCrunch have made inroads as well. Nevertheless, Chobani has not easily relinquished its dominance," comments David Sprinkle, research director, Packaged Facts.
While some food industry experts predict that Greek yogurt sales will begin to fade in coming years, it's difficult to overlook the role Greek varieties have played in resuscitating the overall U.S. yogurt market. According to Packaged Facts, one major factor is responsible for yogurt's dollar sales increase: Greek yogurt. The Greek yogurt subcategory has gone from being practically nonexistent more than half a dozen years ago – it was only about 1% of overall sales as recently as 2007, the year Chobani shipped its first products – to being the most important force shaping the industry. Greek yogurt accounts for more than half the industry's dollar sales, although Packaged Facts' estimates indicate growth has indeed begun to slow from its torrid pace of previous years.
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