Yoplait sales curdle as Greek yogurt gains popularity
MINNEAPOLIS — Yoplait's sales are free falling, and its parent company is about to face even more competition in the dairy case.
General Mills (GIS) said Wednesday that its U.S. yogurt sales dropped 22 percent in the latest quarter as Yoplait's popularity kept fading. That comes as Chobani, which helped lead the Greek yogurt craze that upended the market, says it will launch its first "classic" yogurt aimed at people who find its flagship variety too thick or too tart.
That would more directly compete with Yoplait's core products.
While there are no official standards for what qualifies as Greek yogurt, it is widely understood to be strained for a thicker consistency and to have more protein. Chobani president Tim Brown says the company's non-Greek yogurt will also be strained — but only "a little" so it tastes more like the kind many Americans still prefer.
General Mills, meanwhile, is hoping to spark the next big trend in yogurt with the launch of "Oui," which the company is marketing as being "French style." General Mills is defining that as a yogurt with simpler ingredients that are cultured and sold in glass jars.
The struggles in its yogurt business are dragging down General Mills' overall sales. For the quarter ended May 26, the company's total sales fell 3 percent to $3.81 billion. Sales of U.S. cereals, which include Cheerios, Kix and Lucky Charms, fell 1 percent. The snacks business, which includes Nature Valley bars, increased 1 percent.
CEO Jeff Harmening said the company's execution was not up to its normal standards and it would invest more heavily in advertising and ensuring that its prices are competitive.
"It's clear some actions did not go as planned," Harmening said of the results released Wednesday.
The company's profit for the quarter was $408.9 million, or 69 cents per share. Not including one-time items, it said earnings were 73 cents per share. That was 2 cents better than analysts expected, according to Zacks Investment Research.