Food & Beverage

Oat milk and coffee creamers: Chobani expands beyond Greek yogurt

Key Points
  • Chobani is moving into oat milk products and coffee creamers.
  • Oat milk sales have skyrocketed 636% in the 52 weeks ended Oct. 26, according to Nielsen.
  • Chobani's oat-based products will include oat milk and oat-based yogurt.
Chobani's new oat milk and oat-based yogurts
Source: Chobani

Chobani wants to be known for more than just Greek yogurt.

The company is branching into oat milk products and coffee creamers. The expansion of Chobani's portfolio comes as Greek yogurt's growth has slowed. Protein-packed, low-sugar Icelandic yogurt, also known as Skyr, has stolen some of its shine in recent years.

Still, privately held Chobani holds nearly a fifth of the U.S. market share in all yogurt, according to Nielsen. And its sales are up 9% this year.

"Our ambition has always been to go outside of yogurt, and we're really prepared for it," Chobani's President Peter McGuinness said in an interview.

Oat milk sales have skyrocketed 636% in the 52 weeks ended Oct. 26, according to Nielsen. But oat milk makes up only a small fraction of the larger alternative milk market.

"Cashews never took off. Soy is declining and doesn't taste good, and almond is plateauing because it's really not good for the environment — also a lot of water usage," McGuinness said. "None of those really taste great and deliver a ton of nutrition."

Oat milk has won over consumers with its sweet flavor and a smooth texture that closely resembles cow's milk. The dairy-free drink is made by soaking oats in water.

Oat milk's surge started in late 2016 when Oatly, the Swedish oat milk maker, entered the U.S. and targeted trendy coffee shops like Intelligentsia and La Colombe.

As Oatly adapted to surging demand by adding a New Jersey production plant, competitors entered the market. Elmhurst 1925, a maker of plant-based milks, started producing its own premium version last year. It now supplies oat milk for Starbucks' U.S. roasteries. Legacy companies have also stepped in. Quaker Oats, which is owned by PepsiCo, started selling an "oat beverage" this year.

Chobani's oat milk will hit shelves in January.

The food company started thinking about creating oat products more than a year and a half ago. But the decision stalled after the company decided against co-manufacturing and co-packing. Chobani made up its mind in May to create its own oat products, McGuinness said.

Oatly has since branched out into ice cream made with oat milk. Likewise, Chobani plans to launch oat-based yogurts to attract customers looking for better dairy-free yogurt. Earlier this year, the company's nondairy coconut yogurt hit grocery stores.

But while Chobani believes in oat-based products, it remains committed to dairy. McGuinness said many Chobani customers also buy plant-based products. So the company is launching Greek yogurt that includes oatmeal, for a taste similar to overnight oats. Those products, along with the oat-based yogurts will hit grocery store shelves in December.

And the company wants to disrupt the coffee creamer category with dairy-based options that will be available in January.

The $3.5 billion coffee creamer market is dominated by two players: Nestle's Coffee-Mate and Danone's International Delight. McGuinness said Chobani sees an opportunity in the market for coffee creamers that are natural and made without genetically modified organisms.

"It's exactly like yogurt 11 years ago when we launched Chobani," McGuinness said.

Chobani has long touted itself as a company that makes healthier options for consumers. Many coffee creamers usually use hydrogenated vegetable oils instead of dairy.

Cream also happens to be one of the byproducts of Chobani's yogurt-making. Before making coffee creamers, the company sold some of the excess cream to ice cream and cheese makers.

How Oatly took over America
How Oatly took over America