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Chobani enters into pilot program with PepsiCo

Greek yogurt maker Chobani recently entered into a distribution partnership with PepsiCo to sell its new yogurt drinks at convenience stores, colleges and universities in the northeastern part of the U.S. In the original report on this news, Bloomberg said that this collaboration could extend to other products that are already in its brand portfolio as well as those that are not yet introduced to the market.

By working together, Chobani will gain access to PepsiCo’s expansive chilled distribution network, allowing it to more nimbly respond to consumers and their evolving preferences. It will also benefit the yogurt maker by opening the door to markets from which it previously had restricted access due to sparse populations and the limited distribution networks of the independent company.

Uniting a yogurt maker and a soft drink company makes sense when looking at both corporations' larger strategies. For several years, PepsiCo has been aligning itself with the better-for-you market, investing in both snacks and beverages like BFY Brands, SodaStream, LIFEWTR and bubly that are functional and cater to consumers that are looking for healthy alternatives. Chobani, however, began in this space and has spent the last couple of years gingerly experimenting outside of the yogurt space with cold brew coffees, probiotics and oatmilk.

Should Chobani continue to drift in the direction of functional beverages, a partnership with PepsiCo could become mutually beneficial for both entities. But this is not the first time that this team has worked together. Five years ago, PepsiCo was reportedly in talks to take a stake in Chobani, but no deal was ever reached. Since then, Chobani has continued to grow and is now considering its own independent IPO offering for between $7 billion to $10 billion, The Wall Street Journal reported in February.

As part of its IPO strategy the company said it has “ambitious plans” to delve further into oatmilk and plant-based products. Should Chobani continue to heavily invest in the adjacent areas, teaming up with PepsiCo will help the company spread its already-popular products further into untapped markets and continue to increase its influence in the yogurt and plant-based space – a winning strategy considering that consumers' eating habits have steadily shifted to seeking out healthier food and beverage options that boast less-processed and more recognizable ingredients.