Fage and the yogurt wars.

October 1, 2012

What’s the leading producer of Greek yogurt in Greece?

It’s not Chobani, the hot brand of Greek yogurt in America. It’s Fage with more than 25 percent market share in Greece. Vivartia is N


Furthermore, Fage was the first brand of Greek yogurt introduced in the America market. Fage arrived in 1998, nine years before Chobani hit supermarket shelves. Current market shares: Chobani, 47 percent. Fage, just 14 percent.

Why Fage fell from first place.

Not every pion

eer winds up at the top of the category. Being first in the marketplace doesn’t assure leadership; it only gives you a license to pursue that goal.

Getting into the mind first is what builds leaders; not getting into the market first. Be honest. Did you ever hear of Greek yogurt before Chobani arrived? I didn’t and I assume most consumers didn’t either.

And look at the Fage packages. As you can see, you might think the brand name was “Total.”

The company calls its products “Fage Total Greek Yogurt,” possibly because competitive products are not “total” Greek yogurt. If so, what does Total 0% and Total 2% mean? (Fat content, of course, but it’s certainly an odd way to communicate a simple idea.)

The Fage approach violates what I call the law of the category. If you want to be the category leader, you should forget about the features of the product (thicker and creamier) and focus on your leadership credentials.

“No.1 Greek yogurt in Greece.”

In a media-saturated world, consumers will ultimately figure out the advantages of Greek yogurt and then have to make a brand decision. And which brand are they likely to choose? The brand with the better credentials.

The gold standard in exploiting credentials.

In 1999, three years after Barilla was introduced in the U.S. market, the brand became the No. 1 pasta in America.

            Traditional wisdom credits Barilla’s success to its barrage of 30-second television commercials. An American woman makes eye contact with a mysterious Italian stranger who serves her Barilla pasta, all set to vocals by tenor Andrea Bocelli.

Like many other commercials, the Barilla spots focused on creating rapport with consumers in order to make them fall in love with the brand. There’s nothing wrong with a “falling love” approach provided you add one additional ingredient: credentials.

What were Barilla’s credentials? They were featured in the commercials and on the package. “Italy’s #1 pasta.” (Since changed to “Italy’s #1 brand of pasta.”)

            Subtract the credentials from the commercials and you have nothing but mush. Beautiful, enchanting, romantic mush.

            Advertisers often confuse cause and effect. Sure, every advertiser wants the consumer to fall in love with his or her brand. That’s the effect the advertiser wants to create. But what’s the cause?

            Invariably the cause is some variation of the brand’s credentials. “The brand must be good because it’s Italy’s #1 pasta.”

The dangers of “niche” thinking.

One reason Fage might have hesitated in launching a full-scale U.S. marketing attack is a belief in the power of a “niche” approach.

Some clients of ours have objected to our suggestions because they didn’t want to alert potential competitors. “Let’s keep the brand under the radar. Let’s use a niche approach,” was their thinking.

Niche thinking is obsolete. There are no truly successful niche products. There are either niche products that made it big (Greek yogurt) or niche products that never went anywhere.

Who knows until the market decides. Therefore, a new brand in a new category should think big and assume the category could become a dominant one.

Marketing is like warfare in the sense that small victories are meaningless. “Many assume that half efforts can be effective,” wrote Carl von Clausewitz, “but no on wishing to cross a wide ditch would cross half of it first.”

Many companies have too many brands, too many markets, too many marketing campaigns. In a sense, dozens of half efforts that usually leave the brands in the middle of the ditch. Better to concentrate all of your resources on a few campaigns that have the most promise.

And which campaigns have the most promise? Those that involve brands that are first in their categories.

Next up: Müller by Quaker.

The next yogurt brand to try the American market is “Müller by Quaker,” a joint venture between Müller, a large German yogurt maker, and PepsiCo which owns the Quaker Oats family of brands. The verbal strategy: “European for yummy.”

The two companies are investing $206 million in a plant in Batavia, New York, to produce some five billion cups of yogurt a year.

“Müller by PepsiCo” is an outlandish name, but is “Müller by Quaker” much better? Wouldn’t it suggest to consumers that Müller has found a way to put oatmeal into yogurt?

(As a general principle, why use two names when one would do? Quaker adds nothing to the Müller name except confusion. )

Then there’s the category issue. According to the chief executive of Müller Quaker Dairy, the joint venture will introduce “mainstream premium” products that fill a gap between mass brands like Dannon and Yoplait and niche brands like Chobani and Fage.

Brands live or die based on their positions in either existing or new categories. A brand without a category is on its way out. (Think Yahoo.)

Will “mainstream premium” ever be a new yogurt category? I doubt it.

Michael Brandtner, our affiliate in Germany, once suggested to Müller that they market the brand as “the breakfast yogurt.”

Good idea. Look what a similar idea did for Folgers. “The best part of waking up is Folgers in your cup.”

And on second thought, maybe they could put oatmeal in the yogurt and have a “two-in-one” breakfast brand.

Back to Fage.

What built Fage into the leading brand of yogurt in Greece? Silly question. You know what built the Fage brand in Greece. It was the first branded yogurt in the country.

Fage was also the first Greek yogurt in America. That simple idea could have built a powerful brand. Instead, the company buried its brand name (Fage) and its brand new category (Greek yogurt) under the name “Total” set in big, bold type. Is this the way they practice marketing in the home country?

If so, no wonder Greece is in trouble.