Friday, September 6, 2013

Chobani Recalls Greek Yogurt Due to Quality Issues

Chobani is recalling its Greek Yogurt due to issues encountered by consumers, namely product bloating / swelling. News reports suggest the issue may be related to mold and that there may be some related illnesses.

Initially the company cited this as a quality issue and did not recall the product. But after public outcry and a solid media beat-down, the company issued a recall and ceased distribution of the product (Guardian article below).

Chobani pioneered Greek yogurt, and now controls 35% of the Greek yogurt market. And this market has taken a serious bite out of the traditional yogurt markets, now accounting for about 1/3 of the US yogurt market. Much of this is due to the products higher protein content compared to traditional yogurt (see the nice NY Times article below).

This issue and the lack of a firm response will certainly give the competitors a leg up. Especially when this company had such a ‘consumer oriented’ brand. We’ll need to watch how market share changes after this incident. This case is one of those hard lessons all food companies can learn from.

FDA News Release
Chobani, Inc. Voluntarily Recalls Greek Yogurt Because of Product Concerns

FOR IMMEDIATE RELEASE - September 5, 2013 - Chobani, Inc., of Twin Falls, Idaho is voluntarily recalling Greek Yogurt.

The company has ceased the distribution of the product due to reports of product bloating and swelling and some claims of illness as the company continues its investigation to identify the root cause.

The potentially affected product was distributed nationwide from its Twin Falls, Idaho facility and was delivered to consumers through retail and club stores.

The products subject to recall are identified as follows:
Best By Date Codes
IMS Number
Chobani Branded Products
UPC Codes
Sep 11 –13 (four digit time stamp)
Oct 07-13 (four digit time stamp)
16-012 (three digit line number)
Chobani 6 oz. cups – all flavors
Chobani 16 oz. tubs – all flavors
Chobani 32 oz. tubs – all flavors
Chobani 3.5 oz. cups – all flavors
Chobani Bite™ 3.5 oz. cups – all flavors
Chobani Flip™ 5.3 oz. containers – all flavors
Chobani Champions® cups 3.5 oz. – all flavors
Chobani Champions® tubes 2.25 oz., 8, 16 and 36 count – all flavors
See attached list.

Consumers who have purchased the product should discard the product and may contact the company's Customer Loyalty Team at or call us at 877-847-6181 between the hours of 9am and 5pm ET. Our team is diligently working to coordinate replacements or refunds and will be in touch as soon as possible during this time of very high contact volumes.

The quality of Chobani products and the trust of its consumers are the company's primary concern, and it sincerely apologizes to its consumers impacted by this issue. Chobani holds itself to the highest standards and is committed to fully transparent and decisive action to rectify any identified issues.

This voluntary recall is being conducted with the knowledge of the Food and Drug Administration.

For the entire list of recalled products, go to the FDA website:

Chobani feeling the strain after bad yoghurt prompts safety recall

Greek yoghurt giant of the self-proclaimed 'nothing but good' philosophy recalls pots after reports of vomiting and diarrhoea
Adam Gabbatt,

Thursday 5 September 2013 17.04 EDT

 Chobani, the US yoghurt giant, donates 10% of its after-tax profits to charity. Its products are brightly packaged with images of fresh fruit, and daubed with "only natural ingredients" messaging. And it specialises in the lucrative Greek yoghurt market, targeting health-conscious consumers drawn to its lower-fat, higher-protein qualities. It is a strategy that has seen Chobani compared to Google and Facebook as it hauled in $1bn in revenues last year.

But the company's sunny outlook clouded over this week when it was forced to recall some of its yoghurts following reports of illnesses from customers.

The complaints – which Chobani has attributed to "a type of mold" – are splattered all over Chobani's Facebook page and range from diarrhoea to nights spent in hospital.
Chobani has apologised, and introduced the recall on Thursday, a week after first alerting customers that there may be a problem. "Nothing is more important to us than the health and safety of our consumers, and we are taking all of the necessary steps to uphold our very rigid quality standards," the company said in a statement today.

"If you've purchased these products with the code 16-012, best by dates 9/11/2-13 – 10/7/2013, please discard and contact our customer loyalty team."

The language was rather stronger than the first time Chobani had broached the subject of bad yoghurt on 31 August. Then the company merely said it had "heard quality concerns surrounding certain products, which were experiencing swelling or bloating". It said it was issuing a "voluntary withdrawal", which has since been upgraded to Thursday's recall.

Chobani said a "thorough investigation" had identified "a type of mold commonly found in the dairy environment" which had caused the swelling and bloating. The company said the contamination was limited to products produced at its Idaho plant and had only affected 5% of its yoghurt.

It is a dent to Chobani's self-stated "nothing but good" philosophy. The company, which says it is "committed to supporting local farmers and strengthening its surrounding area economies", accounts for half of all Greek yoghurt sales in the US despite having been founded six years ago in an old Kraft plant in New York state.

Yet for all its feel-good, friendly marketing, Chobani has angered some by initially giving scant information about the cause of its recall and then refusing to be specific on the type of mold that caused the problem.

"Ok, we have two [people] ill – an adult with gastric issues and a rash, and a toddler who hit the skids with gastric for about 10 days. Totally not cool Chobani!," Karen Tonso wrote on the company's Facebook page.

"Please publish the name of the bacterial contaminant so we can get proper treatment that takes our particular medical conditions into account."

Chobani responded that the "health and safety of you and your family is of the utmost importance to us", but did not name the mold.

Tonso's complaint was one of dozens on Chobani's Facebook.

"So this is why my kids' tummies were so sick and why they now refuse to eat the yoghurt," said Lorraine Colwell. Another customer, Lisa Larsen, said Chobani's "delayed actions in reporting problems cost me a night in the emergency room, severe vomiting , and stabbing stomach pain".

The criticism and recall appears to have been particularly galling to the company's CEO, Hamdi Ulukaya, who launched Chobani in 2007, obsesses over the packaging of individual pots and was named Ernst & Young's World Entrepreneur of the Year in June 2013. On Thursday a close-up photograph of Ulukaya dominated the Chobani Facebook page, showing him gazing into the middle distance and looking very contrite indeed.

"My heartfelt apologies to our friends and customers," a message signed 'Hamdi' read.

A spokeswoman for Chobani said the company was investigating and responding to claims of illness. She did not have a specific number of people who had fallen ill, she said.

"Since the problem was first identified, we have had some claims of illness and are investigating and responding to those claims, as there's nothing more important to us than the health and safety of our consumers. I do not have a specific number.

"Chobani began a proactive and voluntary withdrawal of product, after learning that a small quantity had been affected by a type of mold commonly found in the dairy environment.

"While this type of mold is unlikely to have ill health effects, due to some claims of illness the company has decided to go from voluntarily withdrawing to voluntarily recalling the limited amount of potentially affected product."

The Greek Yogurt Culture War

It's Crowding Out Classic Flavors and Others in the Dairy Case; Bye Bye, Margarine
Wall Street Journal September 3, 2013

These are dark days for fans of regular yogurt.

The creamy snack is being edged out on grocery store shelves by its thicker, tarter, higher-protein sibling, Greek yogurt.

Over a third of the yogurt in a typical grocery store is now Greek, in varieties from low-fat to fruit-on-the-bottom to tubes for kids. Because shelf space is limited, the Greek squeeze means consumers have had to say goodbye to some varieties of traditional-style yogurt and more obscure flavors. (R.I.P. Stonyfield Farm's Whole Milk White Chocolate Raspberry and Strawberry Acai flavors.) Pudding cups, margarine and other products with the misfortune of usually sitting near yogurt also are harder to find.

"It certainly has crowded out everything I like to eat," says Kimberly Davis, a 38-year-old resident of Plattsburgh, N.Y., who doesn't like the taste of Greek yogurt but eats traditional yogurt often.

"I like to pick some random, oddball flavor to try, maybe as a dessert, and now there is a lot less of that," says Ms. Davis, who works in banking and local politics. She says she loves coconut and cheesecake flavors. Now she eats plain or vanilla yogurt some mornings, but chooses other things for dessert.

Yogurt consumption in the U.S. has boomed. Long past its reputation as an odd hippie concoction, yogurt sits at an American eating-trend sweet spot. Americans are eating fewer sit-down meals and favor hearty snacks on the go. Yogurt is portable, high in protein and consumers often perceive it as healthier than other sweet snacks (though many varieties are high in sugar).

Chobani Inc. burst onto the scene in 2007 when Greek yogurt made up about 1% of the yogurt selection on shelves, a company spokeswoman says. Now it's the largest seller of Greek yogurt in the U.S. and Greek makes up about 35% of all yogurt on shelves, the spokeswoman says.

Some bigger companies have launched their own brands of Greek yogurt but struggled to catch up, including Danone SA's BN.FR +0.95%Stonyfield and General Mills Inc.'s GIS 0.00%Yoplait. Dannon, also owned by Danone SA, is having more success chipping away at Chobani's lead with its Oikos Greek products.

Meanwhile, the companies have been forced to drop other kinds of yogurt to keep up.

"It has posed a real conundrum" for retailers and yogurt-makers deciding what to put on shelves, says Gary Hirshberg, co-founder and chairman of Stonyfield. Almost all varieties of traditional yogurt, froMore consumers are complaining that they can't find a beloved flavor that's unavailable, Mr. Hirshberg says. They "show up behind dairy cases and say, 'Where is my Mocha Latte, Apricot Mango or Cappuccino?'" he says.

Stonyfield has received about 1,800 product-availability requests from consumers asking where they can find a flavor so far this year. The company received about 1,200 during the same period last year, says a spokeswoman. "In our minds, about half the consumers aren't wild about Greek," Mr. Hirshberg says.

(Chobani recently asked retailers to remove some of its products from shelves because of consumer complaints that packages were swelling and bloating. Chobani called it "isolated quality concerns" that affected less than 5% of its production.)

Most yogurt with Greek on the label is strained, making even low-fat varieties dense and creamy. The process leaves more protein and fewer carbohydrates, making it a hit with the health-conscious crowd. Over half of U.S. households bought Greek over the last 12 months, according to data from retail research firm IRI, provided by Stonyfield, the largest organic yogurt brand in the U.S. Greek varieties are bringing new customers to the yogurt aisle and driving overall sales.

Often a shopper in the yogurt section is looking for a snack that feels healthy, yet sweet and creamy, says John Heath, Chobani's head of innovation. Many of these customers are lured to Greek because they know it has more protein and they like the thick texture, but for a small group, that texture is a turnoff, he says.

The consistency of Greek yogurt is "quite similar to wet cement," says Charlotte Garden, a 30-year-old Boston resident who works at a hedge fund. She eats yogurts with a lighter texture for breakfast most mornings. "It would be easier if I liked it," she says. "I would have so many more options."

Danone, the largest seller of yogurt in the U.S., has dropped a few flavors of traditional yogurt and product lines, such as Danimals Crush Cups, a product marketed to kids. (Eaters squeezed the cup to slurp out the yogurt.) Oikos products now make up about 36% of the company's yogurt offerings, up from 10% two years ago. The company hasn't heard any "collective sighs" from consumers missing the dropped products, a spokesman says.

Stores are creating more space for yogurt, but Greek is taking up more of that space. Today yogurt takes up about 2.2 million linear feet of grocery store shelf space in the U.S., up from about 1.9 million two years ago. During that time, space allotted to Greek yogurt at U.S. grocery stores increased to about 631,000 linear feet, up from about 163,000 in 2011, reducing space for non-Greek products by about 12%, according to IRI data from Stonyfield.

Kids may be set to lead the anti-Greek yogurt charge. "The group who is putting a damper on the market is children," even though they're typically big yogurt fans, says Harry Balzer, vice president at NPD Group, a consumer research firm that surveys eating behavior. Indeed, about 40% of the Greek yogurt products marketed specifically for children—those in smaller portions or adorned with colorful graphics—are purchased by households that don't have kids, says Amy Elkes, insights and innovation manager for Stonyfield.

"I eat Greek yogurt practically every day," says Colleen Pence, a 42-year-old blogger and social media consultant in San Antonio. But when her two kids "try mommy's yogurt they make faces," she says. "It's a little bit more pungent than they are used to."

Only about 8% of households buy exclusively Greek. The vast majority of consumers are buying traditional or some mix of Greek and non-Greek yogurt, Stonyfield's Ms. Elkes says.

To make room for Greek and other varieties of yogurt, Meijer Inc., a Midwestern chain, is growing space for yogurt and dropping some slower-selling products near the section like refrigerated dough for croissants, says Shawn Buckner, group vice president of foods for Meijer. "You do have to juggle," he says.
Supervalu Inc. SVU +1.93%has reduced the space given to traditional yogurt, as well as nearby products with less robust sales like margarine, says a spokesman for the Eden Prairie, Minn.-based company, which owns brands like Cub Foods and Hornbacher's. Stores are reducing the size of the margarine section by about half, while increasing the space they allot for yogurt of all types, the spokesman says.
ConAgra Foods Inc. CAG -0.12%has responded by putting its margarine into square tubs to save every possible inch of space. The company discovered that its typically rounded tubs create a "little star shape between circles" of wasted space on a shelf, says Patrick Fitzgerald, the company's senior brand manager of table spreads. 

By the end of the year, Blue Bonnet, Fleischmann's, and others will only be sold in square-shaped tubs and sticks.

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