While changing consumer behaviour has resulted in slow growth for some dairy companies, evolving trends, including the demand for functional foods, are causing a surge in purchases in this segment of the dairy industry.
Such growth has resulted from an increased number of health-conscious consumers who are buying into products that provide additional benefits.
But, which added-value properties are consumers looking for in functional dairy? Here, FoodBev has provided a breakdown of five factors companies are utilising to capitalise on the demand for functional dairy.
Probiotic products contain live microorganisms which can alleviate digestive problems, improve gut function and promote better overall health. Lactic acid bacteria is just one example of a microorganism typically found in the fermentation process used for probiotic dairy products.
According to a recent report published by MarketsandMarkets, the probiotic market is forecasted to grow at a CAGR of 7%, and will reach a value of $69.3 million by 2023. This rapid increase is largely due to growing numbers of consumers with digestive disorders.
Probiotics are found in a range of dairy products, yet Mordor Intelligence found yogurt to be the most popular option for probiotic consumption in the US, having contributed to 38% of probiotic sales in the country. Clearly, health awareness is a key driver for this market.
The probiotic market is highly competitive, with companies such as Good Culture, Nancy’s Probiotic Foods and Brownes Dairy providing innovative, tasty products that offer functional benefits too.
Jesse Merrill, Good Culture’s co-founder and CEO said: “Probiotic shots are an emerging category, and we saw a void in the space with an opportunity to merge functional ingredients with probiotics”.
With health-conscious consumers wanting products that promise better health, they are creating demand for dairy products that are low in both sugar and fat. According to McKinsey & Company Consumer Packaged Goods, the top three attributes consumers associate with healthy eating are ‘all natural,’ ‘low sugar’ and ‘organic’.
Recent UK Government targets to reduce sugar content in dairy products with the goal to lower the incidence of obesity in children is one factor likely to affect sales of flavoured milk and yogurts. As a result, the dairy industry is under pressure to innovate, produce and deliver products that not only taste good, but also offer nutritional benefits. Examples include Muller’s relaunch of lower-sugar yogurts in the UK and Danone North America’s reduced sugar Activia yogurts. However, these innovations are not restricted solely to milk and yogurt, as demonstrated by Cadbury’s recent debut of their 30% less sugar dairy milk chocolate.
Dr Judith Bryans, chief executive of Dairy UK said: “Given the industry’s hard work and successes in reducing the sugar in the yogurt and fromage frais category, the industry is well placed to action these sugar reduction targets for yogurt drinks. We are an industry characterised by innovation and confident that we can offer consumers the healthy and nutritious products they want”.
With lactose allergies and intolerances on the rise, consumer demand for lactose-free dairy is growing rapidly. Transparency Market Research forecasted sustained growth in the lactose-free market in the period from 2018-2026.
Lactose intolerance can be defined as an impaired ability to digest lactose, a sugar that can be found in milk and other dairy products. According to the Lactose Free Food Market Forecast, around 65% of the human population are affected by lactose-intolerance. It is clear that increased awareness of digestive health among consumers is contributing to the growth of this market.
Nicolas Touillon, Business Director, Dairy, DSM Food Specialities, commented on the rapid growth of this category: “In light of the rapid market growth, it is important that lactose-free dairy producers differentiate themselves to stand out in an increasingly competitive category”.
Taste is one major challenge faced by the lactose-free market, as many products have an undesirable flavour. Companies are having to innovate and produce new, tasty products that cater to these more complex needs. Green Valley Creamery and Saputo Dairy UK are just two examples of large-scale dairy corporations that produce healthy, appealing and lactose-free products.
With life expectancy expanding, and the global population growing older, consumers are becoming increasingly aware of the role of healthy eating in ageing and disease prevention. For senior consumers specifically, strength and healthy joints are of particular importance. As a result, industry players are developing products that promote improved bone health and mobility.
A recent report published by The Dairy Council revealed that respondents in the older generation who consumed more dairy were less likely to develop common conditions associated with ageing, including osteoporosis (the weakening of bones) and sarcopenia (the loss of muscle mass).
Stephen Gregory, Head of Technical Innovation, Fonterra, said: “There is an opportunity to provide solutions for this diverse group of consumers that align to current nutritional trends, which include preservation of muscle mass with quality protein, as well as an increasing focus on digestive wellness.”
“Bone health and mobility is also important to our senior consumers to maintain their independence into later life, and this is well served with dairy with its naturally-present calcium and complete protein,” he explained.
There is rising demand for dairy proteins from both athletes and non-athletes alike. This is because dairy proteins – particularly whey – are known for their high quality, high absorption and complete content of amino acids, which are key for rapid muscle growth. The global market value of whey ingredients is predicted to rise from $6 billion USD in 2017 to $7.1 billion by 2022.
For millennial consumers, a desire to stay fit, enhance body immunity, increase muscular strength and support better recovery is driving the purchase of these proteins. Not only are whey proteins good at promoting muscle growth, but they can act as anti-ageing agents and have been found to reduce stress by lowering levels of cortisol in the body.
It is clear that increased protein consumption from consumers is driving dairy innovation. We are seeing a variety of brands utilising protein in a range of products, from high-protein Peanut Butter Cups to chocolate-dipper snacks, to on-the-go whey protein drinks.
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