In 2012, around the height of the Greek yoghurt boom in the US, Powerful Yogurt launched with a high-protein product tailored for men. The business has carved out a foothold in a tough market, one that has become more competitive as consumer demand for protein-enriched foods rises. Dean Best caught up with Powerful Yogurt founder and CEO Carlos Ramirez to find out how the company is faring.
When Powerful Yogurt launched its high-protein Greek yoghurt in the US two years ago, the fledgling business was entering a booming category – but a highly competitive one.
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With yoghurt (initially aimed at men) sold in eight-ounce containers and offering 25g of protein, the company, set up by former Alpina executive Carlos Ramirez, claimed to have found a niche in the market. And it secured some notable listings, initially among retailers in the Tri-state area and then grocers in the south of the country, including Whole Foods Market and H-E-B Grocery Stores, as well as retailers in the Midwest.
However, the giants of the sector reacted, both through marketing and innovation. Danone, for example, started to promote its Oikos yoghurt as a protein alternative in a bid to target the male consumers becoming more interested in Greek yoghurt.
Speaking to just-food last week, Ramirez reflected on the competitive nature of the yoghurt category, which has only intensified as more mainstream consumers have become interested in looking for protein-heavy foods. And he hints at the challenges facing an up-and-coming company like Powerful Yogurt.
“If you look at the big guys – Danone, Yoplait and Chobani – they are just launching products left and right because they know the name of the game in yoghurt is real estate. It’s owning that fridge. As much as you stuff products in that fridge, you can block competition,” Ramirez says.
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By GlobalDataThat said, the inroads Powerful Yogurt has made has apparently ruffled some feathers, with Ramirez revealing one buyer he visited after they had been seen by Danone claimed the French food company had said the US firm was in financial trouble.
However, the Powerful Yogurt boss is well aware of the challenge a company of its size faces when competing against larger, better-resourced competitors. “It’s tough because mainly the immediate impact is of course distribution. You have buyers saying: ‘I know them, I don’t know you.’ It’s a chicken-and-egg thing. One buyer told me: ‘I want to see you here, here and here before I take you.’ It takes someone to be audacious and aggressive enough to sell your product. Buyers typically are very conservative. You have Danone, Yoplait, the typical companies paying a lot of money. It’s an easy decision [for a buyer].”
Powerful Yogurt has turned to alternative channels and to innovation to try to continue to grow its business – and to enhance its appeal to the larger retailers in the US. Ramirez says the size of his business means it can react with speed. “As an entrepreneur, you move faster. I did a little pilot in a 150-store chain in New Jersey. The product is flying off the shelf. It’s right now one of my best customers,” he says. “This is leftovers from the big guys. However, you have 100,000 convenience stores in the US and 20% of that are really good stores. If you think of a guy going to fill up the car and he gets to the convenience store and he wants to buy a beef jerky or a protein shake, now he finds Powerful Yogurt. We are growing in alternative channels. We are focusing on convenience stores and universities that keeps the company under the radar but growing a lot. Then we have the numbers to talk to the big guys.
This year, Powerful Yogurt has expanded into protein bars and, more recently, protein drinks. Ramirez is candid about the performance of the bars in another fiercely competitive category. “I want to be transparent,” he says. “It’s going ok. I want to gain traction. We placed the bar with a distributor focusing on sports nutrition and they are saying ‘Your bar is great tasting but you need to be patient as there are a lot of bars out there.’ I have the bars in supermarkets and we have coupons sending people from the supplement aisle to the dairy aisle. They can actually see that somebody buying bars and supplements is going to the dairy aisle and buying Greek yoghurt.” However, he adds: “My emphasis would mostly be on the drinks and the yoghurt.”
Powerful Yogurt is conducting a soft launch of its shelf-stable protein drinks in independent stores in New York City this month, with plans for a wider roll out in January.
“We have had very strong conversations with [health and nutrition retailer] GNC. They want to take the product nationwide and even internationally,” Ramirez says. “Now we’re going straight to the big guys – we are talking to Wal-Mart, Kroger, Publix. I want to go mainstream with these products. When you see products out there that are not natural we have a proposal that is affordable, great tasting and all-natural.”
Outside the US, Powerful Yogurt had plans to launch in the UK and Ireland in the early weeks of 2014. Manufacturing problems delayed the launch, Ramirez says, although those issues look to have been surmounted.
“We had a lot of issues with the separator for getting the whey out in the Greek yoghurt. The milk and conditions were so different that we had to adapt our formula over and over. To be honest, I like the product better now than I do in the US. We are in the next two or three weeks launching in Ireland in 150 stores. It will also start in November in London through a website,” Ramirez says. “In the UK, we have a plan for launching the brand, with a soft launch and then a full launch. The distributor plans to take all of the products – the drinks and the bars. We want to look at the rest of Europe, now that we have the plant producing Powerful Yogurt in Ireland.”
Ramirez is optimistic about the company’s prospects, even if rumours a larger company in the US could be launching a similar yoghurt come true. “I was in Safeway and they told me they wouldn’t take Powerful Yogurt because they are taking a brand that is going to go nationwide with the same concept. We don’t know who it is,” he says. However, he adds: “I think that’s going to help generate a category and validate what we are doing. We’re going to win some and we are going to lose some. The category will be created, which is what we have been trying to do as a small company. We have small budgets, we can only do so much, but if one of the big guys gets into this market, we have another category that’s going to be created.”
That said, Ramirez argues consumers will need to be educated about the proliferation from protein-heavy products that are hitting the food market as a whole. “The problem is, especially in the US, we take everything to the extreme. People consuming protein like crazy is bad for you. If you consume more protein than you should, it’s bad for your liver. We as responsible companies should also educate our consumers that there’s a certain amount of protein you should consume every day that depends on your size, age, work and routine, if you exercise or not,” he says.
“You see right now cookies with protein, mayonnaise with protein. Everything has protein without the rationale behind it. It’s important that we educate consumers.”
