General Mills, criticised over its US yoghurt business, is stepping up its activity in the sector, with an NPD drive in the next 12 months. However, the company faces rivals also on the front foot.

General Mills CEO Ken Powell revealed plans to launch “more of a traditional Greek product” next month as the group looks to revitalise its struggling US yoghurt business.

The unit saw sales decline in the last financial year, the consequence of General Mills having to play catch-up in the booming Greek yoghurt segment.

The US yoghurt sector has seen rapid growth in recent years, driven by the booming Greek yoghurt segment, which has taken share from the regular categories. 

Rivals Chobani and Danone have built bigger Greek yoghurt businesses than General Mills, which only launched its first product in the category in 2010. In the last 12 months, General Mills has rolled out new Greek yoghurt products in the US, including a 100-calorie Yoplait line.

And, on a conference call to discuss the firm’s results yesterday, Powell was quick to emphasise price point adjustments did lead to a sequential improvement throughout the year.

In the coming year, the company expects to get its yoghurt sales moving thanks to a “good line up” of new products. During the first-half alone, General Mills is preparing to launch a staggering 22 products.

In particular, General Mills’ pipeline includes a Yoplait traditional Greek product that will start shipping in July to replace its former Greek offering, which is being taken off the shelves. “It’s a filtered traditional Greek yoghurt. It has absolutely a terrific taste profile, and we believe that will be very well received by consumers,” Powell said.

In addition, Powell said he expects to see further growth of the Yoplait Greek 100 line. “We think that’s going to be well over a $100m in year one,” Powell predicted.

“We’ll be bringing new flavours to that, multi-packs, all the things that we can do to continue to give that product the growing shelf space that it will deserve. We feel quite good about the innovation that we’ve got on that business. So we’ll have high levels of advertising and we’re sort of loaded for bear here and feel optimistic about 2014.”

General Mills will also be bringing new capacity online this summer in response to the expected increase in demand, management revealed.

While General Mills was upbeat about its prospects for growing its yoghurt revenues, it is important to note the group’s competitors are not resting on their laurels.

Only yesterday, Chobani added to its yoghurt range new lines and flavours. The move from the Greek yoghurt specialist comes as Muller Quaker Dairy, PepsiCo’s US yoghurt venture, rolls out products across the US after the opening of its plant earlier this month.

Announcing its plans, Chobani, the largest player in the Greek yoghurt segment emphasised the potential it sees in the US yoghurt sector. “We know that the yoghurt market in America is just beginning; European consumers eat up to seven and a half times more yogurt per capita,” John Heath, senior vice president of innovation at Chobani, said.

And, while General Mills is adding capacity, rivals like Chobani and Muller Quaker Dairy have, too. There are signs the extra capacity in the segment has led to an upsurge in promotional activity in recent weeks, potentially putting pressure on margins.

General Mills is grasping the nettle in US yoghurt but, in a highly competitive sector, it will have to work hard for a slice of this growing pie.