When it comes to exports in the Australian food and beverage manufacturing sector, dairy is one category that is showing no signs of slowing down.
A recent report from IBISWorld found that demand for milk and dairy is expected to post strong revenue growth over the next five years, reaching up to $4.2 billion by 2019-20 – a trend that yoghurt manufacturer Chobani is well placed to capitalise on.
Food magazine recently caught up with managing director of Chobani Australia, Peter Meek to discuss the brand’s recent export endeavours, together with the success of the brand in Australia to date.
Originating from the US, Chobani first launched its Australian arm two years ago and since then, Meek says that the business has essentially doubled, leading to an inundation of keen distributors wanting to take on the Chobani brand.
On the back of this, Chobani Australia sent its first palette of product to Singapore in April this year, and announced in July that that it will be extending its reach within South East Asia by exporting to Malaysia.
“We were very focused on entering Singapore,” Meek told Food Magazine. “Our view is that it’s the gateway to Asia so we made a very conscious decision to go into that market. We knew that there would be lots of other potential distributors within the broader region that would see Chobani and how well it’s selling… so Singapore was a very conscious decision. And of course the reality is that Malaysia is next door and relatively easy to manage at the same time.”
As far as catering to local tastes in the South East Asian region, Meek says that the brand hasn’t really needed to adapt any of its product offerings as yet, however once the market has matured, the development of more localised flavours may be on the cards.
“The initial point is to use our existing flavours. It’s fascinating if you go into Malaysia and Singapore as the top flavour in both of those markets is still Strawberry. So while the palettes are very different, there are certainly a lot of flavoured products that we’ve already got that are absolutely relevant to them. So we don’t really want to introduce any complexity in the first stages, but in the longer term and as the markets reach a critical mass, of course we will look to localise flavours and bring local propositions to those markets.”
In terms of the brand’s success, Meek credits it towards a number of factors; namely an excellent product. Chobani employs the traditional Greek method of making yoghurt which involves a straining process to remove up to two thirds of the liquid – an additional step that many yoghurt processors avoid due to the associated costs.
“In Australia we are literally the only large scale manufacturer that strains its yoghurt because it’s an expensive process," he says.
"We use over three litres of milk to make every kilo of yoghurt, whereas normal yoghurt uses about one, or one and a half litres of milk… Traditionally, (the Greek style) is how yoghurt has been made for hundreds of years and that’s another interesting point. It’s not as if it’s a new innovation. All we are doing is bringing back the process of how yoghurt was made, and how it should be made,”
“Word of mouth and referral is also such a big part of how we’re building the Chobani brand. Marketing today is really very different to perhaps five years ago… At the end of the day, if you’ve got a great product, people start talking about it, then all of a sudden you’ve got a market success and I think those are the new rules of marketing.”
In addition, Meek credits excellent suppliers to the company’s success. When asked about potential supply issues that could arise in the future due to the brand's continuing growth, Meek is optimistic.
“The South-East Asian market gives us quite a bit of scope. We’re still just one factory so we suspect that if we’re successful with these markets quite quickly, capacity is going to become a bit of an issue," he says.
"But obviously, if we find that we’re running out of capacity we will categorise that as a five star problem. Our business has been built so quickly because we’ve always invested ahead of the curb for capacity. So I’m sure if we got to the point where we’re saying ‘ok we can’t keep up with all of these new markets’, than we would just invest.”
For a well-established company such as Chobani, the idea of exporting product into new countries may seem like somewhat of a natural progression, but Meek says that smaller Australian manufacturers that are looking to export should simply get the ball rolling – providing that they have a good product.
“You can over research it and worry about if you’ve got it right, but you’ve really got to get into the market and talk to the distributors and they’ll help you craft what you need to do to enter those markets,” he says.
“You’ve also got to have a great product. If your product doesn’t deliver locally, don’t think that Asia is a target for a sub-standard product because it’s quite the opposite. You’ve got to have a great product to start with, and the third point is that you’ve got to be passionate about what it is that you’re doing. You need to find partners that are excited to work with you because then they are going to go the extra mile and make sure that they build that distribution, and represent your brand in a way that creates market success in the new market.”