Dive Brief:

• 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 partnership with PepsiCo 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. 
• Chobani's pilot program with PepsiCo will 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. 

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. 

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.

CPGs have dealt with increased costs for transportation, manufacturing, warehousing and raw materials over the last year, and many expect for those costs to continue throughout 2021, according to an Institute for Supply Management's manufacturing report. Chobani's distribution partnership with PepsiCo could be a beneficial way to cut some supply chain costs by having products closer to their final destination, while also reaching more markets. 

"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.

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. 

Last month, reports indicated Chobani is considering going public at a valuation of $7 billion to $10 billion.

A.B. Brown contributed to this report.