Home Lifestyle Food Chobani enters crowded RTD coffee space

Chobani enters crowded RTD coffee space

Chobani took its biggest step yet to grow beyond dairy with the rollout of ready-to-drink cold brew coffees — bringing the company up against heavyweights such as Nestlé, PepsiCo and Danone.

The coffees mark a logical extension for the New York company that has moved beyond Greek yogurt in the last few years with functional wellness beverages, plant-based oat milk, as well as dairy and plant-based oat creamers — both of which are being incorporated into the new offerings. The Chobani Coffee is available in 32 ounce cartons in four flavors: Cold Brew Pure Black without sugar or dairy; Cold Brew with Sweet Creamer; Cold Brew with Vanilla Creamer; and Cold Brew with Oat Milk.

The new Chobani coffees, which will be available nationwide at grocery and retail stores this month, contain only natural ingredients, no artificial flavors or sweeteners, and no preservatives. Niel Sandfort, chief innovation officer at Chobani, said the move into coffee was “a natural evolution” after it became familiar with the market through its work with creamers and milks, giving it confidence in how it could disrupt the category in a similar way.

“We’re carefully stepping out of this yogurt space,” Sandfort said. “We want to do that iteratively with the consumer. We don’t just want to randomly show up in some distant land and the consumer to lose the logic of what is Chobani doing here.” 

As the products hit shelves, Chobani will find itself going up against an increasingly crowded space for ready-to-drink coffee. Sandfort said unlike many ready-to-drink coffees loaded with synthetic ingredients consumers may not be aware of, Chobani’s beverages stand out with their blend of coffee from Arabica beans and fresh cream or oat milk.

PepsiCo has been selling Starbucks ready-to-drink coffees in stores for a quarter century. Coca-Cola distributes Dunkin’s bottled coffee in the U.S. and last year announced plans to sell its signature soda blended with the caffeinated beverage in 2021. Nestlé acquired Chameleon Cold-Brew and a majority stake in Blue Bottle Coffee a few years ago. Danone has been expanding the reach of its Stok cold-brew coffee it acquired following the $12.5 billion purchase of WhiteWave Foods in 2017.

But it’s not only Big Food taking advantage of this trend. More startups, including Califia and La Colombe, also have launched ready-to-drink products.

Starbucks remain far and away the most popular ready-to-drink coffee in the U.S. in 2020, with more than $117 million in sales, followed by Stok at $100 million, according to Statista.

It’s no wonder that companies like Chobani are spending more to enter the ready-to-drink coffee space. The category has nearly doubled sales from four years ago to $2.6 billion for the 52 weeks ended Jan. 2, according to Nielsen data, with revenue up 17.2% from the prior year.

“We’re used to going up against very large companies in the yogurt set,” Sandfort said. “We’re used to going up against very large companies in creamers. We don’t lose sleep over that.”

Chobani has made no secret about its broader goal to grow itself into a modern food company. While yogurt remains the biggest revenue generator for the New York dairy giant founded in 2005, Chobani has moved aggressively in recent years to expand into other fast-growing areas popular with consumers. 

In addition to its work in oats and creamers, Chobani has rolled out yogurts blended with nut butters, a children’s yogurt, a variety made from plants and a lactose-free Greek yogurt. Last month, it doubled down on probiotics already in high demand during the pandemic through a line of yogurts, drinks and pouches loaded with the microorganism.

“When I started at Chobani 11 years ago I thought I was kind of joining a niche yogurt company, and on my day one, [founder Hamdi Ulukaya] had a much bigger vision and its coming to fruition,” Sandfort said. “You continue to see us make sure that we’re in all those big segments of yogurt and now we’re ready to take the next step out of the space and that’s what’s been happening here over the last couple of years.”

Sandfort said the company is looking to expand its offerings in oatmilks, creamers, probiotics and even in ready-to-drink coffee with new flavors and formats. It’s also looking at disrupting other parts of the dairy segment, though he declined to provide details.

“There are opportunities for us all over the store, frankly,” he said. “We’re definitely looking into other spaces.”

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