Flavored Yogurt Market Analysis

Flavored Yogurt Market Deep Dive – PESTLE, Porter, SWOT

The yoghurt market is a dynamic sector of the dairy industry, with a broad range of products that cater to changing consumer preferences and trends in health. As consumers are increasingly looking for convenient and healthy snack options, yoghurts with flavours have become more popular. They are easy to eat, taste good and are perceived as healthy. The yoghurt market is influenced by a variety of factors, including the growing demand for probiotics, the rise of plant-based alternatives and the development of new flavour combinations that appeal to a broad audience. The growing awareness of gut health and the role of dairy in a balanced diet are also driving the consumption of yoghurts. Product innovation, marketing strategies and the use of sustainable practices are becoming more and more important for success in this vibrant market.

PESTLE Analysis

• Political:
  In 2024, the yoghurt market will be influenced by several political factors, including government regulations on food safety and labelling. The Food and Drug Administration in the United States has issued stricter regulations requiring all yogurts to contain at least 10 per cent of the daily requirement of calcium per 100 g serving. This will affect product development and marketing strategies. Trade policies, such as the imposition of a 15 per cent tariff on dairy imports in some regions, will have a significant impact on the cost structure of manufacturers that depend on imported raw materials.
• Economic:
  In 2024, the economic background of the flavoured yogurt market is characterized by the increase in expenditure on health-related products. According to the latest figures, the average household expenditure on dairy products, including flavoured yogurt, increased by 8% year-on-year, to about $1,200 annually. In the light of the increase in income, consumers can afford to buy a larger variety of flavoured yogurt, and more expensive, organic or pro-biotic flavoured yogurts.
• Social:
  In 2024, the trend towards healthy snacks is reflected in a 66% demand for low-sugar, high-protein yogurts. This trend is being driven by an increasing health consciousness, especially among millennials and generation Z, who are more likely to choose a flavored yogurt as a healthy snack. Also, the increasing popularity of plant-based diets has led to a 25% increase in demand for non-dairy flavored yogurt alternatives, which reflects changing dietary preferences.
• Technological:
  In the year 2024, technological advances in food processing and packaging are influencing the yoghurt market. High-pressure processing (HPP) is used by one-third of producers to extend shelf life and preserve quality. Moreover, the use of smart packaging which can indicate freshness and nutritional content will rise by 20 per cent in the coming year, thereby increasing consumer trust and engagement with yoghurt flavours.
• Legal:
  The flavoured yogurt market in 2024 is influenced by the regulations and legislation concerning the labelling of food. In Europe, the European Union has made it compulsory to clearly label the nutritional information of all foodstuffs, including flavoured yogurt. This has caused a 40 per cent increase in the cost of complying with labelling regulations for manufacturers. The regulation of health claims on the packaging of foodstuffs is also being discussed. This may also have an effect on marketing strategies and product development.
• Environmental:
  The environment is becoming increasingly important in the yoghurt market. Indeed, consumers are willing to pay a premium of up to 50% for yoghurts that use sustainable packaging. By 2024, the industry expects to have increased its use of biodegradable or recyclable materials by 30%. The impact of dairy farming on the environment is also being studied. Leading yoghurt manufacturers have therefore set themselves a target of reducing their carbon footprint by 10%.

Porters Five Forces

• Threat of New Entrants:
  The flavored yogurt market has a moderate barrier to entry, including significant investment in production and marketing. But with the increasing popularity of healthy and convenient snacks, new entrants may be attracted to the market. The market has a high degree of customer loyalty, which is a barrier to entry for new entrants. But new entrants with unique flavors and health benefits may have opportunities to enter.
• Bargaining Power of Suppliers:
  The bargaining power of suppliers on the market for flavoured yogurt is relatively low. There are many suppliers of raw materials, such as milk, fruit and flavourings, and it is easy for manufacturers to change suppliers. Furthermore, the presence of alternative suppliers and the possibility of obtaining supplies from different regions also reduces the bargaining power of suppliers.
• Bargaining Power of Buyers:
  The buyers of yoghurt have a high bargaining power because of the wide variety of products. Brands are easily swizzled according to price, taste and health considerations. The growing demand for healthy and natural products is also a powerful negotiating tool. The companies are forced to differentiate and invent new products.
• Threat of Substitutes:
  The threat of substitutes in the flavored yogurt market is moderate. There are many other snack foods, such as fruit juices, milk shakes, and other dairy and non-dairy snacks that can meet the same needs. However, flavored yogurts have unique flavors and textures, so the degree of substitution is limited, especially among loyal consumers.
• Competitive Rivalry:
  The competition for the yoghurt market is fierce, with many established and new brands competing for market share. On various counts, companies compete: flavours, health benefits, packaging, price. The presence of large international companies and of smaller niche brands makes the competition even fiercer. It leads to frequent marketing campaigns and product innovations.

SWOT Analysis

• Strengths:
  • Diverse flavor offerings catering to various consumer preferences.
  • Growing health consciousness among consumers driving demand for yogurt as a healthy snack.
  • Strong brand loyalty and recognition in established yogurt brands.
• Weaknesses:
  • Higher price point compared to traditional yogurt may limit market penetration.
  • Perception of flavored yogurts as less healthy due to added sugars and artificial ingredients.
  • Limited shelf life compared to non-flavored alternatives.
• Opportunities:
  • Expansion into emerging markets with increasing disposable incomes and changing dietary habits.
  • Innovation in product formulations, such as low-sugar or probiotic-rich flavored yogurts.
  • Growing trend towards plant-based diets means opportunities for non-dairy yogurt alternatives.
• Threats:
  • Intense competition from both established brands and new entrants in the market.
  • Regulatory changes regarding labeling and health claims could impact marketing strategies.
  • Economic downturns affecting consumer spending on premium products.

The flavoured yogurt market in 2024 is characterized by a high degree of brand loyalty and a wide variety of flavours that are particularly suited to the tastes of health-conscious consumers. However, the price-to-health ratio may be a hindrance to growth. Opportunities lie in new markets and in product innovation, especially in health-related formulas. Threats are, however, posed by the intense competition, and also by the impact of possible changes in legislation on product positioning.