In yogurt world, Greeks are down and Vikings are up

Bloomberg

It’s high in protein, low in sugar, and just right for the struggling American dairy industry.
It’s Icelandic yogurt, also known as Skyr, and as the meteoric popularity of the Greek product fizzles, farmers are hoping the new variety will help lift them out of years of lackluster demand. A big reason dairy producers love it: Recipes for one pound of Icelandic yogurt call for four pounds of milk — four times the amount needed to make traditional yogurt.
US dairy farms could use some good news. For more than four years, retail milk prices have been disappointing, and farmers are reacting by slaughtering more cows than they can replace. In July, a gallon of whole milk cost $2.84 a gallon, the lowest price since at least 2007, according to the US Department of Agriculture. In March, the price of a gallon stayed below $3 for a 15th straight month.
It’s a different story for Icelandic yogurt. While US yogurt sales dropped 3.4 percent in the 12 months ended in February, the Icelandic style jumped 24 percent to $173.9 million, Nielsen data show.
The Viking invasion is “one of the few bright spots,” said Icelandic Provisions CEO Mark Alexander, who took the helm of the yogurt maker two months ago.
Alexander is a former executive at Campbell Soup Co, where he led the acquisition and growth of Plum Organics baby food. Now he says he plans to repeat that success at the three-year-old yogurt maker, whose sales last year doubled each quarter.
Siggi’s, another maker of Skyr, is also hoping for big growth. The New York-based company buys milk from farms in upstate New York, Wisconsin and Pennsylvania.
Icelandic yogurt is thicker than Greek yogurt. That’s accomplished by separating water and whey from the milk, leaving behind more solids. “Greek yogurt breathed new life in the category, but since its introduction there’s been little innovation,” said Darren Seifer, food and beverage industry analyst at research firm NPD Group Inc. “The yogurt category is in need of news.”
A glass of milk just isn’t that sexy, and the lack of excitement has hurt the dairy industry. At Star Rock Dairy in Pennsylvania, revenue has been down about 20 percent as shoppers opt for plant-based milks and non-dairy foods. Co-owner Rob Barley says he’s supportive of anything that uses more milk. He says new high-protein items, like Icelandic yogurt, are the future of the dairy industry.
“That’s just the way society is,” Barley said.
Skyr remains a niche item in a mature market, and it’s too early to tell if it will help yogurt sales, which have waned since the bump of the Greek boom. Annual US yogurt consumption has been declining since 2014, with the average American eating 13.7 pounds in 2017, the latest year data is available, according to the USDA.