Gillian Tan is a Bloomberg Gadfly columnist covering deals and private equity. She previously was a reporter for the Wall Street Journal. She is a qualified chartered accountant.

Greek-yogurt maker Chobani often encourages consumers to make the right choice, but it may not be taking its own advice.

The company said late Friday it had rejected PepsiCo's offer to take a majority stake because it was only interested in selling a minor piece of itself.

So even though Goldman Sachs found it an established partner that could help with distribution and production, the company intends to pay for its own growth plans. Those include entry into new markets such as Mexico and expanding its "Flip" product, which packages yogurt with toppings such as almonds, dark chocolate and graham crackers. 

Staying independent is a bold call. Chobani has recovered from a string of setbacks -- including a product recall, canceled orders and production delays -- mainly because it accepted a $750 million cash injection from private-equity firm TPG. Such hiccups and others may arise as it enters new markets or launches new products like yogurt-based dips, which currently only exist in Australia.

Chobani commands a leading 11.6 percent share of the U.S. yogurt market by dollars spent, according to January data from Chicago-based market research firm IRI, but its lead is narrowing and has slipped from 15.3 percent as recently as two years ago.  Adding insult to injury, a judge last month halted a Chobani ad campaign that slammed Dannon's "Light & Fit" and Yoplait's "Greek 100" rival products, calling it misleading.

Yogurt Wars
Chobani has a narrow lead on U.S. rivals.
Source: IRI Worldwide
Note: Based on a 52 week analysis

While fighting to keep an edge on rivals, Chobani faces a hard truth: The growth of Greek yogurt has slowed since 2014, according to EuroMonitor International. To survive that trend, Chobani must keep innovating, and now without any help from the deep pockets of Pepsi, which spent $718 million on research and development in 2014. (PepsiCo is due to report 2015 numbers on Thursday.)

It Pays to Innovate
If majority-owned by Pepsi, Chobani could have benefited from the giant's R&D spending.
Source: Bloomberg

Global expansion has already proven tough. In 2013, Chobani withdrew from the U.K. market and has yet to attempt to relaunch there or anywhere else in Europe -- counterintuitive, considering the region is home to the world's highest per capita consumption of yogurt, according to EuroMonitor International.

The market research firm expects Chinese consumers to buy more yogurt than British consumers by 2020, meaning Chobani needs to try to crack the world's most populous market sooner rather than later. That certainly would be easier with help from a strategic investor such as Pepsi, which operates its largest food and beverage research and development facility outside the U.S. in Shanghai and recently opened a Quaker Oats plant in Beijing. 

If it can thrive on its own, then Chobani seems destined for an initial public offering. But it must prove its mettle. 

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Gillian Tan in New York at

To contact the editor responsible for this story:
Mark Gongloff at