Differentiation requires investments in new packaging, raw material sourcing and manufacturing processes.

Milkfat tastes good. It is satisfying and, when partnered with the complete protein found in cow’s milk, it’s a nutritious, satiating ingredient. That is what consumers are finding as they explore new full-fat options in the evolving yogurt case.

Whole milk yogurt (Greek and non-Greek), with 9% share of retail yogurt volume sales, is the fat-content segment experiencing the greatest growth, according to data from Chicago-based Information Resources, Inc. provided to Dairy Management Inc., Rosemont, Ill. During the first 11 months of 2015, whole milk yogurt volume sales were up more than 26% while fat-free sales were down 4%. The momentum is expected to continue in 2016 due to an abundance of whole milk yogurt innovations entering the marketplace.

The whole-milk innovations come under both the Greek and non-Greek yogurt banners. The segments, as part of the total yogurt category, maintained 37% and 63% share of volume sales, respectively, in the first 11 months of 2015. Greek yogurt continues to increase in volume (up 4%), with pricing nearly unchanged from 2014, while non-Greek volume sales are relatively flat.

Growth for both formats is not coming from single-serve cups, which command 69% of volume share but are down 0.6%. It is with multi-serve tubs, which typically range in size from 16- to-32 ozs, and make up almost a fifth (19%) of all refrigerated yogurt sold through retail channels. Volume sales of tubs have increased 6% this past year, likely due to consumer use of yogurt as an ingredient in such recipes as blended with fruit and cereal or as a substitute for sour cream or mayonnaise in dips, dressings and salads. It is no wonder that the No. 2 and No. 3 most popular yogurt flavors are vanilla and plain, as they are the varieties most often used in recipes.

Drinks, which include kefir, lassi and smoothies, have only 8% share, but are up 12% in volume sales. The format has experienced ups and downs since the turn-of-the-century, which is likely due to consumer confusion with how to include such products in a daily eating regime. With the rise of all-day healthy snacking, coupled with consumers’ shifting away sugary soft drinks, the time may finally be right for yogurt drinks.

The evolving pouch product

Tubes and pouches remain a small segment (4.5% share), yet have grown by 1% this past year. The products historically have been formulated and marketed to toddlers and preschoolers, and thus have a limited market.

This may change with some of the new products and package redesigns entering the market. For example, Ready Greek Go Inc., Snohomish, Wash., is bringing Greek yogurt into the ambient aisle. The Greek Yogurt Smoothie pouches come in three varieties —berry, mango and strawberry with chia seeds — and are designed for on-the-go adults who want a whole milk dairy protein and fruit snack free of artificial ingredients. Being shelf stable, it may be carried as a convenient snack, but unfortunately, aseptic processing eliminates live and active cultures.

The dual compartment package has been a successful application for Chobani with its Chobani Flip products.

Stonyfield Farm, Londonderry, N.H., has long made tubes and pouches of yogurt for children. The company recently partnered with Nurture Inc., New York, marketers of the Happy Family brand of organic foods, to offer whole milk organic yogurt pouches for the entire family to enjoy. Varieties are blueberry, vanilla, pear-spinach-mango, and strawberry-beet-berry.

Stonyfield also is growing its Greek yogurt offerings with a whole milk line that comes in a first-time container for the company: a split cup. The interactive package allows the consumer to mix in such inclusions as blueberries, cherries, honey or strawberries into the yogurt.

The dual compartment package has been a successful application for Chobani, Norwich, N.Y. Branded Chobani Flip, the package was first introduced by the company in 2013 and started bringing new users to the Greek yogurt category. The use of culinary-inspired mix-ins takes yogurt out of the breakfast daypart, according to the company, which projects Chobani Flip to be the next billion dollar yogurt brand.

At the beginning of the year, the brand made its boldest flavor statement with the roll-out of two “heat meets sweet” varieties: chipotle pineapple and sriracha mango. Two other new Flip offerings are peanut butter and jelly and limited-batch peppermint.

Standing out in a competitive market

Greek is not the only way to differentiate whole milk yogurt. Milk source is an option. For example, Organic Valley, La Farge, Wis., now offers Organic Valley Grassmilk Yogurt, which is made from milk produced by cows that are 100% grass-fed. Such a diet yields milk with noteworthy amounts of better-for-you fatty acids, including conjugated linoleic acid and omega-3 fatty acids, according to the company. Processed in small batches, the cream-on-the-top yogurt is made from non-homogenized whole milk. It has a unique, creamy taste, and fits into the up-and-coming segment of artisan yogurt. The product rolled out in 24-oz multi-use tubs in plain and vanilla flavors.

In the fall of 2015, Sierra Nevada Cheese Co., Willows, Calif., introduced Graziers Yogurt, which is made with milk from local grass-fed cows. The non-homogenized, cream-on-top whole milk yogurts made their debut in plain and vanilla varieties (6-oz cups and 24-oz tubs), as was as two organic fruit options — blueberry and strawberry — in 6-oz cups. Less than six months after the launch, two new fruit varieties — lemon and mixed berry — are joining the single-serve line.

General Mills recently brought Annie's brand into the refrigerated yogurt case with Annie’s Organic Whole Milk Yogurt.

Greeks are not the only ones with unique yogurt production techniques. Aussies and Icelanders are touting recipes in the United States, and getting noticed. Both varieties together only account for 1% volume share, 0.7% and 0.3%, respectively, but both are becoming more popular due to their batch-crafted, artisan reputations … something Chobani and others lost when they grew and started discounting their products for the mainstream marketplace.

For example, Smari Organics, Petaluma, Calif., quickly became a national artisan yogurt brand after launching in 2013. The brand kicked off as a line of authentic Icelandic yogurts, or skyr. These strained yogurts are thick, fat-free, low in sugar, and rich in protein and calcium. Made with milk from grass-fed Jersey and Guernsey cows, the original line includes four fat-free options: blueberry, pure, strawberry and vanilla. Although Icelandic yogurt traditionally has been made to be fat free, Smari is opting to give American consumers what they want. Now the brand includes whole milk varieties in six varieties: black cherry chia, key lime, New Orleans coffee, pineapple, pure and vanilla.

Australian-style yogurt, on the other hand, always has been about milkfat. Noosa Yoghurt LLC, Bellvue, Colo., produces its namesake yogurt in small batches using whole milk. The non-strained yogurt is lightly sweetened with honey.

As the pressure builds to keep consumers interested in yogurt, marketers are investing in developing products that invite trial and encourage repurchase. General Mills Inc., Minneapolis, long has recognized that getting children eating yogurt at an early age keeps them consumers for a lifetime. Since acquiring Annie’s Inc. in September 2014, General Mills has been growing the Annie’s brand, and most recently brought it into the refrigerated yogurt case with Annie’s Organic Whole Milk Yogurt. Sold in four-packs of 4-oz cups, the yogurt comes in three child-friendly varieties: berry, strawberry and vanilla. The probiotic yogurt is described as being sweetened with organic fruit and a touch of cane sugar.

Noosa Yoghurt LLC produces its namesake yogurt in small batches using whole milk.

Knowing consumers are mixing and blending vanilla and plain yogurt with cereals, fruits, nuts and seeds, the company is growing its Plenti line with Yoplait Plenti Oatmeal Greek Yogurt. The new 5.5-oz oval-shaped bowls combine nonfat Greek yogurt with oatmeal and fruits and join the original Yoplait Plenti Greek Yogurt line that debuted in June 2015, which includes whole grain oats, flax and pumpkin seeds.

Dannon, White Plains, N.Y., continues to invest in its brands, in particular its probiotic Activia brand. The most recent introduction is Activia Fruit Fusion, a layered product of reduced-fat yogurt with fruity combinations of blueberry and blackberry, cherry and vanilla, peach and mango, or strawberry and raspberry.

“What we see from our vantage point as the clear market leader is that growth in both interest and consumption of yogurt among Americans comes from innovation in the form of different flavors, styles and packaging formats, coupled with retailers dedicating more space from underperforming categories,” said Michael Neuwirth, senior director of public relations at Dannon, a business unit of Groupe Danone. “This has been the case since we started making yogurt in 1942.”