Thursday, August 30, 2018

Yogurt Innovation: The Biggest Growth Opportunity is in Kids’ Products, especially Breakfast Items

“Quite frankly, we missed Greek. 
And what we realized a couple of years ago is, that’s OK. The category is always evolving. So rather than continue to chase that revolution, let’s lead the next two.”

This was said by Doug Martin, Yoplait USA vice president of marketing for General Mills Inc., when discussing the company’s strategy for yogurt innovation on CBS Minnesota on Aug. 13, 2018.

Although he did not specifically call out kids’ product as one of the upcoming yogurt category game changers, my industry sources and market data suggest that yogurt products designed for kids’ taste buds and parents’ label preferences are where many yogurt companies are dedicating innovation resources. Regarding the latter, this includes natural claims and lower sugar contents.

The Kids Food and Beverage Market in the U.S., 9th edition report from Packaged Facts explains that marketers must take a dual approach to satisfy the needs and interests of parents (as the purchasers) and youngsters (as the consumers) when participating in the kids’ segment. The influence of children on household grocery habits is well documented, but parents are becoming more determined to find a happy medium with products that satisfy the kids without sacrificing nutrition. And there’s a lot of money at stake!

Almost half (46%) of households with kids spend more than $150 weekly on groceries, compared to less than a quarter (22%) of households without kids. And as to be expected, weekly grocery expenditures increase with the number of children in the household, according to the report.

Among parents, “fresh” is the most sought after product quality. Yogurt, of course, fits the bill!
Fresh is followed closely by products on sale/promotion and store brands with lower pricing. The availability of a coupon could help parents rationalize a purchase for kids’ products that are new or may not be enjoyed by the rest of the household, according to Packaged Facts.

The report shows that an all-natural claim is sought out by 36.5% of parents. Nearly a third (30.8%) look for non-GMO claims while 27.9% seek out an organic claim.

“In a competitive packaged food and beverage market, it’s important for manufacturers and marketers to better understand how to strengthen appeal among the category purchaser, the parent,” says David Sprinkle, research director at Packaged Facts. “To that end, food marketers must consider product qualities, dietary lifestyle characteristics, and diet claims to ascertain which attributes parents are most likely to seek out when buying foods and beverages.” 

He explains that free-from claims, such as gluten-free, are viewed by parents as a way to approach health, as are no and low sugar claims.

In a separate report--Retail Product Trends and Opportunities in the U.S., 2nd Edition—Sprinkle suggests that there’s a huge opportunity for portable kids’ yogurt items designed for the breakfast daypart.

“There is much room for innovation in breakfast foods,” he says. “With the reputation for the most important meal of the day, maximizing the reputation of a product’s nutrition while highlighting its’ convenience, is critical in appealing to demographics across the board.

“With most ‘breakfast believers’ being either baby-boomers or families with children, companies are producing new products in an attempt to expand the market by getting younger adults hooked on breakfast foods.”

Yogurt has been a staple of the breakfast foods market for a long time, most recently manifesting itself in the recent Greek yogurt craze. Now that Greek yogurt’s popularity has slowed, marketers are looking to drinkable yogurt and yogurt smoothies to take its place at the breakfast table or meal on the go.  And while the product isn’t new--think Danimals--it’s one of the fastest-growing breakfast foods, logging a growth rate of 20% in the past year, according to Packaged Facts, which projects that the drinkable yogurt market will grow another 13% by 2022.

“New drinkable yogurt products can capitalize off of the nostalgia young adults may have for products such as Danimals, while also appealing to their more grown-up taste buds, nutritional interests and busy schedules,” says Sprinkle. 

Sources tell me that Chobani has big plans for the kids’ yogurt segment. The company recently trademarked the name Chobani Gimmies, and plans to use it on a number of kids’ yogurt products. This includes a dual-compartment concept with kid-friendly mix-ins, such as cotton candy popcorn and funfetti cake. The Chobani Gimmies brand will also include a drinkables concept in flavors such as cookies and cream and mint chip. Stay tuned for complete reporting on these products when they start rolling out in October.

Snacking yogurts are another opportunity. These are often interactive products that are great for backpacks and lunchboxes. 

New Stonyfield Organic Snack Pack is a refrigerated dual-compartment container with flavored yogurt in one part and a dipper in the other, making this a no spoon needed treat. Designed for kids, the three combinations are: Chocolate Yogurt with Pretzels, Chocolate Yogurt with Graham Crackers and Strawberry Yogurt with Graham Crackers. A single-serve 2.4-ounce pack contains 110 to 130 calories, 1 to 2.5 grams of fat, 6 to 10 grams of sugar and 3 to 4 grams of protein.

Sources tell me Yoplait has a similar product rolling out called Yoplait Go-Gurt Dunkers. Interestingly, yogurt’s healthful halo got a boost this week from research presented at the annual congress of the European Society of Cardiology in Munich, Germany. The new research suggests that consuming dairy products such as cheese and yogurt may protect against both total mortality and mortality from cerebrovascular causes.

To read more about the meta-analysis, link HERE.

Sugar content and artificial ingredients may tarnish yogurt’s positive reputation as a nutrient-dense food, as the Packaged Facts research suggests. That’s why with kids’ yogurt innovation, it is paramount to keep sugar content on the lower side, as sugar intake is being monitored by parents.

Ingredients such as chicory root fiber/inulin are often used to lower sugar while boosting the fiber content in dairy foods. Some of these products are as high as 65% the sweetness of sugar, yet still contain at least 75% dietary fiber, a nutrient of concern. They are declared on ingredient statements as fiber; thus, they don’t contribute to the yogurt’s sugar content. Chicory root fiber/inulin also functions as a prebiotic, fueling probiotics, the beneficial bacteria found in many yogurt products as well as in the gastrointestinal system.

Expect to see chicory root fiber/inulin being used in more dairy foods, especially yogurt, thanks to the recent ruling on fiber ingredients. According to a final guidance published on June 14, 2018, in the Federal Register, inulin and inulin-type fructans, including chicory root fiber; high-amylose starch (resistant starch 2); polydextrose; mixed plant cell wall fibers, including sugar cane fiber and apple fiber; arabinoxylan; alginate; galactooligosaccharide; and resistant maltodextrin/dextrin are now recognized by FDA as fiber.

The approval of these eight non-digestible carbohydrates gives food manufacturers additional clarity in updating their labels as needed ahead of the compliance date for FDA’s new Nutrition Facts Label, which is Jan. 1, 2020, for manufacturers with $10 million or more in annual food sales, and Jan. 1, 2021, for smaller manufacturers.

The announcement follows various petitions, many with like-ingredient suppliers joining together to request the addition of beneficial non-digestible fibers to FDA’s definition of fiber, which was issued on May 27, 2016. This was FDA’s first time defining fiber, with the definition being “non-digestible soluble and insoluble carbohydrates (with three or more monomeric units), and lignin that are intrinsic and intact in plants; or isolated or synthetic non-digestible carbohydrates (with three or more monomeric units) determined by the FDA to have physiological effects that are beneficial to human health.”

All of the eight recently approved fibers fit the second definition. The petitions, and supporting research, clearly showed that the fibers support physiological health benefits as assessed by FDA’s strict criteria, according to Carl Volz, president of Sensus America.

FDA’s examples of beneficial physiological effects include lowering blood glucose and cholesterol levels; lowering blood pressure; increase in frequency of bowel movements (improved laxation); increased mineral absorption in the intestinal tract; and reduced energy intake (for example, due to the fiber promoting a feeling of fullness).

Speaking to inulin, the most commonly used fiber food ingredient in dairy foods, namely yogurt, “The FDA’s inclusion of chicory root fiber as a dietary fiber in its new food labeling regulations allows our customers to continue marketing their products as sources of dietary fiber and to continue to use chicory root fiber as a tool to reduce calories and added sugar,” says Volz.

To read the FDA published ruling, link HERE.

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