Chobani reaches distribution deal with PepsiCo for some products ahead of possible IPO

Source: fooddive.com

Dive Brief:

  • Yogurt maker Chobani announced a pilot program with PepsiCo to distribute Chobani Complete yogurt drinks and other products to convenience stores, colleges and universities in the northeastern part of the U.S., Chobani confirmed to Food Dive. The Greek yogurt maker hopes to expand the partnership to products that haven’t yet been introduced. News of the partnership was first reported by Bloomberg.
  • Chobani said the partnership allows the yogurt maker to use PepsiCo’s robust chilled distribution network, where products are fresher and closer to the point of sale, allowing it to more quickly respond to customer needs. The agreement also will allow Chobani to grow in areas where there isn’t expansive distribution or a concentration of people and into categories where PepsiCo’s size provides an easier reach. 
  • Last month, reports indicated Chobani is considering going public at a valuation of $7 billion to $10 billion. PepsiCo reportedly was in discussions to take a stake in Chobani five years ago, but no deal was ever reached.

Dive Insight:

When it comes to scaling up, finding ways to tap into existing supply chains instead of having to create ones from scratch offers an expedited approach. With Chobani gearing up for a possible IPO, boosting its market share, profits and consumer exposure are key priorities. 

As the pandemic continues to impact consumers’ eating habits, many people are opting for healthier food and beverage options that have more natural, recognizable ingredients. Ensuring that its products targeting these areas are within easy reach and taste fresher will help Chobani capitalize on these shifting trends. 

Chobani has been investing heavily in launching new products in recent years. With the pandemic providing many consumers with an opportunity to think differently about their diets and how they shop, a new distribution deal with PepsiCo could be excellent timing. Chobani said it was attracted to PepsiCo’s vast distribution network as a way to bring more of its better-for-you offerings to consumers.

“Teaming up with PepsiCo accelerates Chobani’s mission, helping us reach more corners of the country and giving our fans new ways to buy our simply crafted and wholesome products,” Hamdi Ulukaya, founder and CEO of Chobani, said in a statement emailed to Food Dive.

Some of Chobani’s new product activity dabbles outside dairy, including launching its cold brew coffees, probiotics and oatmilk as well as expanding its yogurt offerings to formulations blended with nut butters and a kids’ line. Its Chobani Probiotic line is a fruity plant-based beverage that is said to provide a number of health benefits, while Chobani Complete is a high-protein, lactose-free, no-added-sugar yogurt. 

“We’re carefully stepping out of this yogurt space,” Niel Sandfort, chief innovation officer at Chobani, said in January. “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.” 

If Chobani continues to explore new beverage offerings, PepsiCo would make a perfect partner for getting those products into channels like convenience stores and college campuses. Working with Chobani also will give PepsiCo an early look into new products being developed by the company while at the same time helping the drinks and snacks maker further expand its own push into healthier offerings.

PepsiCo and Chobani have been flirting since 2016 when the yogurt manufacturer considered selling a minority stake. Chobani ultimately opted against it when PepsiCo and other suitors expressed interest in snagging a majority stake

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