just the answer - Carlos Ramirez, Powerful Yogurt CEO
By Dean Best | 23 August 2013
Carlos Ramirez, CEO of Powerful Yogurt
Powerful Yogurt launched in the US last year, claiming to be the first Greek yoghurt designed for men. After securing retail listings in the Tri-state area, the brand is expanding further along the East Coast with Kroger and has just announced plans to do business across the Atlantic in the UK and Ireland. Dean Best speaks to founder and CEO Carlos Ramirez about the competition in yoghurt and his ambitions for the brand.
just-food: Have you seen Danone has just launched a yoghurt for men in Bulgaria?
Ramirez: It's great actually for us. If you look at their cup, it's exactly the same cup as we have.
just-food: Brands that have identified a niche and then see larger players enter the category tend to say it is good for business. Do you genuinely feel that or do you feel concerned that the might of Danone is looking at the segment?
Ramirez: It really is good for us the big guys are validating our position. I always knew somebody was going to copy what we were doing. They know there's a big opportunity out there.
just-food: What was the spark that enabled you to come up with the idea for Powerful Yogurt?
Ramirez: The 'aha!' moment was in 2012. I was working for Colombian company Alpina, which I helped to get into the US. I saw everybody was just talking to women but as a consumer, I wanted more protein, a bigger cup. I said: 'How come everybody is just talking about digestive health when the yoghurt has a lot of benefits beyond that?' I saw my friends consuming a lot more yoghurt, especially big yoghurt because of the protein content. I started digging and found 45% of guys consumed yoghurt in the US and at a frequency of 7.3 versus 7.5 cups of women per month.
just-food: Who are the owners of the business?
Ramirez: Myself and friends and family. We have three or five institutional companies interested in the company and that's probably something we are going have in the next round in December, January next year.
just-food: Even if you wouldn't be willing to sell the business at this stage, could you take some cash injection to help you grow?
Ramirez: Sure and I think that's required as, especially in this market, you need so much cash. We need funding to buy our way into the retailers. In the US, the slotting fees are crazy and you have PepsiCo with Muller investing in buying their way in. To be honest with you, I don't think the product is that good. You also have Chobani with 30 SKUs and you have Danone with new products. Now it's a matter of getting onto the retailers' shelves and getting people to know the product. We need the money to create that footprint.
just-food: Where are the brand's biggest markets in the US?
Ramireze: In the Tri-state area. We are expanding to the north east and in the last quarter of the year we are signing up with a big retailer in the south east. We already have a lot of demand from the West Coast and I am looking to process some partnerships to start there next year. We have also received a lot of interest from different parts of the world. That's why we did the deal with Irepak to test it in the UK and Ireland and then take it from there.
just-food: Who is the brand aimed at? With the level of protein, one could assume it is aimed at men to support health regimes.
Ramirez: At the beginning we said guys. Basically guys are bigger and need more protein. The industry is downsizing the cup but we came up with this big 8oz container to target guys. Now we are saying if you are active enough as a woman to take an 8oz cup and 25g of protein, this product is for you. It's more lifestyle, rather than someone focused on being in the gym 24/7.
just-food: Aiming at a wider consumer base means more competitors. How can Powerful Yogurt aim to compete with the likes of Chobani and PepsiCo/Muller?
Ramirez: The big guys are just fighting each other, which is good for us at this point. That gives us time to gain a footprint and some advocates for our brands. Our positioning of being a product for guys, post-workout, healthy meal, it's very easy to pick up there and translate that into a regular lifestyle. Competitors are going to enter the market but at least I am building speed bumps. We are creating a network of ambassadors - personal trainers - that are recommending my product. We have a window of opportunity of a year to build a very strong brand and build beyond those gyms. It's a matter of having the funds to replicate as fast as possible so when the big brands come in they can either partner with us or compete with us.
just-food: Analysts see a key reason for the boom in Greek yoghurt in the US is health. Powerful Yogurt is marketed differently but you will still be facing these big competitors.
Ramirez: Our immediate competition is Chobani and Fage but when you expand the competitive set and talk about protein, I am talking about Muscle Milk, powders, bars. In that arena, we win hands down because we are natural and great tasting. I am talking to a different consumer. I am against the other guys on the shelf but there's a wider net here. Our next product is the yoghurt drink for next year. In the future, you could get a Powerful Yogurt bar once you create a brand around being all natural, being great tasting and high in protein.
just-food: How do you look back and rate the development of the brand?
Ramirez: It's more than I expected - the pace, not the result. It's faster than I thought it was going to be. We sold the first yoghurt in December and in March we got all this media attention in the US that put us on the spot. I wanted 2013 to be under the radar, gain footprint and then do more in 2014. In March, we received free advertising from the different chains talking about the product. That's great but at the same time it put more pressure on the company and that's why we are raising more capital to be out there faster because we definitely need to have a stronger footprint before the big guys get in.
just-food: Why have you looked at the UK and Ireland?
Ramirez: The UK has been constant, since day one, not only retailers or manufacturers but the most important piece - consumers. In the UK, it's not so much about the protein like in the US, it's more about the manly position of the product, you have a product that is healthy and is finally targeted towards guys. It's going to be very focused, at the beginning just London and then Manchester.
just-food: Are you planning to roll out Powerful Yogurt into the major supermarket chains in the UK?
Ramirez: We have had conversations with big retailers. Now we are focusing on making sure the quality of the product is what we are expecting. The brand and the campaign needs to be customised. In January, the idea is to start with one retailer and start expanding. In the US, we did a soft launch as there is a lot of stuff you have to fine tune. We did 50 stores for a period of two months and then we rolled it out and that's kind of what we want to do in London.
just-food: Is the size of the cup and protein going to be the same?
Ramirez: The cup will be the same. One thing we are looking is the protein content. The important message in the UK is not the protein. We are trying to understand what's the benefit that better resonates with consumers there. In the US there is this hype with protein. In the UK we may have to talk about the benefits of building lean muscle, losing fat.
just-food: Are there other markets beyond the UK and Ireland you would like the brand to be launched into?
Ramirez: We do have strong interest from one big company in Argentina and one big company in Brazil. Those are the markets we are looking into after we test the waters with Irepak. I have a lot of stuff to do in the US and I need to support Irepak, too. If it works, this licencing agreement model is helpful for us.
just-food: If we were to look to 2015, 2017, where would you like to the business to be?
Ramirez: I would like to see it being a $100m company - and a protein company. This is way beyond yoghurt. There is so much that can be done in that area. When people look at protein, they want to take the protein no matter what. When you look at the bars, they are full of sugar. If you look at the protein shakes and they are full of stuff that is not good for you. We have the capability and knowledge to have products that are great tasting, all natural and high protein. This is food. If you taste the bars? Awful. It has to taste really good, if not, forget it.
just-food: You would like to still be CEO and in charge of the business in 2017?
Ramirez: That's a long time for me! I look right now month to month, generating capital.
just-food: Do you still expect the business to be independent then?
Ramirez: It's a possibility. It's hard in this market to be honest with you. There's a moment in time you have a $1bn company against you and they're saying: 'You either join us or we compete against you.' You have Chobani that proves that wrong but you see them once every ten years. I would love to be open to have an independent company. In the US, because of the distribution it's going to be hard. When you look at retailers, it's a premium piece of real estate. When the other guys are buying their space in, it just goes up and up and up. I know that PepsiCo spent $1.2m in buying their way into the retailers just in the East Coast.
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