Friday, July 27, 2012

Marketing to Lactose-Intolerant Consumers

Real or perceived, a growing number of consumers claim lactose intolerance, and as a result, avoid all dairy products. This, as those of us long-timers in the dairy industry know, is not necessary. Research shows that consumers with “real” lactose intolerance can actually tolerate small doses of fluid milk (the dairy product that’s the most concentrated source of lactose) throughout the day. Further, there are many dairy products that contain so little lactose, that they should not be an issue.

For example, many natural cheeses—the more aged the cheese, the less lactose—contain less than 0.1 grams of lactose per serving, with sugars reported as zero on Nutrition Facts. (So why does one of my friends pop a lactase enzyme pill even after sprinkling some aged Parmesan on top of her pasta? It goes back to the “real or perceived,” and if she thinks that Parmesan will cause discomfort, it will.) 

Most fermented dairy products—kefir, sour cream and yogurt—also contain very low levels, if any, of lactose. Yet, seldom is this information relayed to consumers who want to enjoy dairy products but intentionally avoid them because they fear the repercussions of consuming lactose, which typically comes in the form of gastrointestinal distress.

There’s also data showing chocolate milk is better tolerated by those intolerant to lactose, and this may be due to the added cocoa, which slows the transit time from stomach to colon. This might be why some find whole milk is better tolerated, too, as fat slows transit time.

For the most part, “lactose intolerance” symptoms occur when the load of lactose is very large and rapidly arrives in the large intestine of consumers who do not possess sufficient amounts of the enzyme lactase.  That’s when lactose can overwhelm the system. If small amounts of lactose slowly arrive, the microflora in the gut digests the lactose at an even rate and no or minimal discomfort is experienced by those individuals who truly have lactose intolerance, a.k.a., do not produce sufficient lactase.

With that said, marketers around the world are recognizing that there’s a great deal of opportunity in flagging the minimal to zero lactose content of dairy products. For example, Lifeway Foods just started touting the fact that its kefir is 99% lactose free. This information is boldly printed on product labels.

If you can too, do it! Why?

Well, for starters, the dairy industry has an opportunity to achieve 273 million gallons of incremental growth by targeting the lactose-intolerant consumer segment, according to a 2010 Innovation Center for U.S. Dairy white paper from Dairy Management Inc. (DMI). Through analysis and insights gleaned from several studies, including a survey of 10,000 Americans, the white paper provides the dairy industry with a roadmap to better understand and effectively reach consumers who avoid dairy due to real or perceived lactose intolerance, and ultimately to help bring them back to the category.

“Our extensive consumer research and analysis found that 81% of lactose intolerant consumers would be willing to include dairy in their diets if they could do so while minimizing symptoms,” said Jim Layne, vice president of strategic initiatives at DMI. “This shows that a solid opportunity exists to meet the health and enjoyment needs of this market segment with nutrient-rich dairy foods.”

By expanding the availability and variety of lactose-free milk and milk products beyond in-home consumption and educating consumers that, in most cases, they can keep dairy in their diet one way or another while minimizing symptoms, the dairy industry can offer this market segment the taste and nutrition they crave in ways that meet their specific needs. These efforts will not only help increase demand for lactose-free milk, but also for other more easily digested dairy products such as natural cheeses and yogurt.

“There is a solution to lactose intolerance that is not avoidance or restriction,” Layne said. “Increasing consumption of dairy in the lactose-intolerant consumer segment could help grow long-term loyalty, generation after generation, totaling 2.35 billion pounds of incremental growth.” 

To read this white paper, click HERE.

Further, according to research by New Nutrition Business, the lactose-free dairy category has experienced 100% growth during the past five years, and is one of the most significant yet little-noticed developments in the food and beverage business. While many companies have had their eye on the surge in gluten-free products, few have noticed that consumers’ desire for products that are “free-from” something that they perceive as negative for their health has also been having an effect in the dairy category.

Innova Market Insights data indicates that global new product launch numbers for lactose-free dairy products more than tripled in the five-year period leading up to the beginning of 2012. The share of total tracked dairy introductions featuring a lactose-free positioning rose from less than 2.5% to 4.5% over the same period. Levels of interest and subsequent new product activity have been particularly high in the U.S. and Western Europe, which saw products marketed as lactose-free account for 10% and 6% of total dairy launches, respectively, in the 12 months to the end of March 2012.

Here in the States, McNeil’s Lactaid brand can now be found in pretty much every dairy product category—from refrigerated yogurt to cottage cheese to fluid milk to ice cream. Earlier this year, General Mills extended its Yoplait yogurt brand with the sub-brand of Lactose Free.

Kozy Shack now offers its puddings in a lactose-free formulation. The line includes Lactose Free Rice Pudding, Lactose Free Tapioca Pudding and Lactose Free Chocolate Pudding.

The development of private-label ranges, in particular within the fluid milk sector, has also driven awareness in the market, with most of the major U.S. retail chains now offering an extensive range of lactose-free milk products, including flavored products.

Valued-added milks also now come in lactose-free variants. For example, there’s Smart Balance Lactose-Free Fat Free Milk with Omega-3s. The product also contains 20% more calcium and protein and sports the REAL Seal. Organic Valley has an extensive range of lactose-free milk offerings.

Danone’s market-leading Activia yogurt brand now includes a lactose-free option in a number of European markets. In New Zealand, the Anchor dairy brand has been extended in the milks market, with two lactose-free alternatives under the Zero Lacto Blue and Zero Lacto Trim ranges. Finland’s Valio offers lactose-free butter.

In Germany, Omira Oberland-Milchverwertung GmbH, a dairy that developed the Minus L Laktosefrei line of cheese, fluid milk and yogurt a few years ago, continues to grow its dairy products line, as well as expand use of its lactose-free dairy foods into other products. Less than a year ago, the company debuted mascarpone cheese, vanilla sauce and ready-to-eat pudding, all made with its lactose-free milk. There’s also a new instant cappuccino mix based on a dried milk powder derived from this milk. In addition, Minus L Laktosefrei mozzarella cheese is being used on a namesake line of frozen pizzas.

According to New Nutrition Business, there are few markets where you can win “a customer for life,” customers who are also willing to pay a premium. Lactose-free dairy is one of them. This is an opportunity to win back customers who want to be back.

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