July 6, 2012
CPGmatters: Chobani Leverages Sampling to Stir Up Yogurt Category in Supermarkets
Through a special arrangement, presented here for discussion is a summary of a current article from the monthly e-zine, CPGmatters.
The whole point of Greek-style yogurt is that it tastes better, richer, creamier — yes, more indulgent — than regular American yogurt. That’s why Chobani founder Hamdi Ulukaya believed that, if he could get samples of his Greek yogurt into the hands and mouths of grocery shoppers in the U.S., his startup would be a big hit.
In 2007, the native Turk put together a number of loans to buy an idle yogurt-making plant in Columbus, N.Y. that had been abandoned by Kraft Foods. In the meantime, he began perfecting the recipe for what would become Chobani, relying on a family friend and early employee who was a master yogurt maker from Turkey.
The next crucial step, of course, was getting Americans to like it. Europeans and Middle Easterners have long derided U.S. tastes in yogurt because the stuff that is popular in America is but a pale imitation of the robust and flavorful varieties that are staples across the Atlantic Ocean.
So Mr. Ulukaya and his handful of cohorts began their marketing with an exhaustive campaign of in-store sampling in New York and elsewhere in the Northeast. The samples were also full six-ounce cups to give patrons a fair chance to enjoy and appreciate the truly different taste of Greek-style yogurt, rather than just pique their interest with a smidgen. So quickly did consumers begin to rave about and demand Chobani from their supermarkets, that the brand didn’t have to advertise at all. In fact, the first Chobani campaign didn’t take place until this past February.
Since the first couple of years of heavy supermarket sampling, Chobani’s promotional emphasis has turned to a couple of trucks that the brand uses as peripatetic mobile platforms, one on behalf of the main brand and a second spreading the word about Champions, Chobani’s brand aimed at kids. The trucks visit family festivals, sporting events and other venues — still handing out full six-ounce cups of Chobani.
Ulukaya’s hunch was right. Just five years after its launch, Chobani is now the No. 2 maker of non-frozen yogurt in the U.S. and is closing in on $1 billion in annual sales this year. Greek products also now account for about one-third the volume of the entire yogurt category despite demanding a significant price premium from consumers, in part because it requires three times the milk of regular yogurt to manufacture, and in part because it’s the hottest dairy product in history.
"We never underestimated the American yogurt consumer," said Niel Sandfort, director of marketing for Chobani, told CPGmatters in an interview. "Their ability to sniff out value and quality is incredible."
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Discussion questions: Generally, what are the upsides and downsides to launches focused on extensive sampling? What’s the best way to maximize such efforts? What other categories could notably benefit from greater sampling?
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The primary lesson from this experience is to use sampling for products that truly have taste appeal. This would not have been successful with a product that was less than satisfactory or “me too” in taste, texture, ingredients or price.
Any marketer who is sure her food product or household item rocks…can try what Chobani tried. You don’t really have to overdue the sampling in that you can begin in a few stores and expand with positive feedback. It seems like a low risk proposition. But if your product doesn’t have what it takes to create positive word of mouth you’ll know real soon and can cut bait.
The upside is to ability to put the product directly into consumers’ hands and mouths. The downside is cost. Sampling programs are expensive. In light of the cost, brands should be careful when selecting sampling locations. Choose the right venues and times of day to maximize exposure to targeted consumers. Make sure the people doing the sampling know the product and present it well to consumers. Determine if a limited time coupon will also be available to consumers. If done well, sampling programs can launch a product and drive sales.
Sampling has been around as long as the Greeks or Turks have been making yogurt. Obviously the downside is that it takes significant human resources to execute properly, especially in-store, but if the consensus is favorable, then it is certainly worth the effort.
In terms of how best to accomplish this, they landed on a two-pronged approach that makes a lot of sense. First, sample in store so that the connection is made between the shopper and the store management. It is the shopper who pushed the store to carry it. They then took it beyond the store to a wider audience of consumers because as we all know, they may not be the same as the shopper, so you need to reach both effectively. Other categories that may benefit from sampling include energy bars and other convenient meal replacements or better-for-you snacks, at least in the northeast.
Costco is the king of sampling and it pays off. 1) sampling creates an event in-store that customers are excited about. On the drive over you are thinking about what samples may be offered. 2) sampling is a great way to build interest for a new brand or flavor.
Two other examples of sampling that drove brand acceptance include Red Bull and Bear Naked Granola.
The downside to sampling is cost. Sampling can be extremely expensive, but with the right product, timing, and location, it is a very effective way to build trial and brand acceptance.
Other categories that could benefit from sampling: toys (example LEGO) and restaurants (example free sample appetizer or dessert) to name two.
Sampling makes sense when the product is difficult to describe. How does one effectively describe Greek yogurt? You don’t. Therefore, you sample.
Sampling makes sense when trial addresses issues of taste, performance, usage, etc., that cannot be adequately conveyed via traditional or even social media. Performance and usage issues can be described via a YouTube format, thus representing a form of sampling. However, the same is not true for issues of taste, texture, mouth feel, etc. You need to have the customer experience the product. If you believe you will win the “in the mouth” battle, sample.
When I talk with competitors to Chobani, they note that it was around for years before it took off. Now I wonder if it was a regional rollout based on the sampling plan and if so, they might have mistakenly interpreted national shares for a phased rollout. There is a great paper on innovation that says that the real advantage of the market leader is that they define the standard for how to judge a type of product, but occasionally a new product comes around that redefines that standard. My instincts tell me that is what happened here.
It’s hard to argue with success, but I’ll give it a try. Others here have properly commented on the great cost of in-store sampling, and in many ways, this is the nub of the issue. Obviously, Chobani made a success of it, for the reasons others have cited — concentration of their effort; a worthy product; stimulating a small, viral fire that could grow into a blaze.
Years ago, I was doing a lot of Controlled Store Testing — new product introductions with carefully balanced test and control stores, as the basis for sales forecasting. Often clients wanted sampling in test stores to goose the response. This led us to carefully consider the impact of sampling on sales, which, unless sales were otherwise minimal, didn’t amount to much — at substantial cost per “sale.”
Think about it: with 5,000 – 10,000 shoppers going through a store on a Saturday, a sampling table is going to reach, at most, a few hundred shoppers. The reach is pathetic, at a relatively large cost. Does this make sense? It does if you are actually lighting a fire, as Chobani has. But this would very definitely not be a general guide to new product introduction. Most sampling appears to be a massive waste of resources.
But there is another aspect of this, discussed in Kahn’s and McAlister’s "Grocery Revolution." This is the fact that many retailers love to have demos in their stores, as it creates something of a “fair” or “party” atmosphere — at least when done right. So, from the retailer’s point of view, what’s not to like? Increased in-store activity, possibly additional sales, and all paid for by the supplier, the retailer’s usual source of easy profits.
Sampling works — if done right. As many have noted, Chobani had a product with a favor profile, mouth feel, etc., that appealed to its target market. By starting small and then expanding, they reduced the downside of sampling.
Nothing would be worse than to do a mass sampling campaign and have the internet ablaze with how bad your product is. Even after the product was changed/improved it would be a very uphill battle to gain traction.
What Chobani needs to do, beyond sampling to consumers, is to provide the trade with a clear vision on how to make the most of the established and still growing popularity of Greek yogurt. The trade should be made to understand how to promote, how to merchandise, how to set the shelves and a host of other in-store and marketing issues. Greek yogurt is how. The sampling results show that. Now the next step should be taken with a vision for the trade on how they can best satify their shoppers needs relative to Greek yogurt.
No amount of food sampling will get consumers to actually pay for the product, if the product doesn’t taste good. The Chobani story is a great example of how sampling should work and why sampling continues to work. First, the company perfected the product and then they overcame any consumer price and quality reservations by giving the Greek yogurt to shoppers at no cost.
For me, the best part of this story is that Chobani also uses trucks to reach even more consumers in a more fun and creative way. While the consumer is in a relaxed mindset — not a shopping mindset — Chobani slips the product into their life, bringing with it a sense of surprise and great taste while also building brand gratitude in the consumer’s mind.
Such outside-the-box sampling isn’t new. Still, I’d like to see more food makers take their products to the streets, rather than waiting for the consumer to come looking for the goods. And other product categories can be slipped into the consumer’s daily lifestyle, like home furnishings. I recall a furniture brand that set up vignettes in the public subway system, and another that outfitted a fan space at a Major League Baseball stadium.