by Amanda Smith, Associate Editor
Its heady adoption of Greek yogurt propelled New York to its status as the nation's leading yogurt manufacturer. With Greek yogurt as the catalyst, Packaged Facts forecasts that overall yogurt sales' revenue could grow over 27 percent in the next five years. Despite expected dynamic growth, maintaining this title won't be without challenges.
In a Cornell University research paper, economists cited the following struggles Greek yogurt makers will face:
- A cluttered and confusing yogurt case - The yogurt section of the dairy case is getting more complex. The amount of space allocated to yogurt is growing by linear feet at the expense of conventional yogurt and other refrigerated products.
- More stringent barriers to entry - Slotting allowances raise the cost of market entry. Bigger players have entered the market with the financial ability to pay slotting allowances. While some shelf space can be wrestled from other products, it is tight. Retailers are in the driver's seat and will drop poorer performing brands to resell those slots.
- The costs associated with acid whey disposal - The disposal of acid whey is a major challenge. For every 7,000 gallons of milk, there will be 4,200 to 4,900 gallons of acid whey to handle.
- Elevated competition -There is a feeling that overcapacity exists or soon will in the U.S. market. Competition reduces margins - prices fell from $4.88 a pint to $3.31 a pint between 2006 and 2011.
