Friday, March 29, 2019

The Scoop on Ice Cream, Milk, Dairy-Based Beverages, Yogurt and Cultured Dairy Foods

Photo source: Dairy Management Inc.

It was wonderful to see so many Daily Dose of Dairy subscribers at ProFood Tech this week in Chicago and a big welcome to the more than 100 new subscribers who I had the pleasure to meet at the expo. I hope you will enjoy being part of this dairy innovation community.

To view any of the Daily Dose of Dairy LIVE! presentations from ProFood Tech, please click on the title.

Trends in Frozen Desserts
Trends in Yogurt and Cultured Dairy Products
Trends in Milk and Dairy-Based Beverages

Here are five key takeaways from these presentations.

1. Seasonal/Limited Edition. Limited-time-offerings keep consumers interested in the category and your brand. Knowing that a flavor may not be available the next time they shop creates an urgency to purchase. Even if dollars are tight, consumers are often willing to dig deeper into their pockets to make sure they experience the flavor adventure you are selling.

2. Value-Added Nutrition. To differentiate in the crowded refrigerated and frozen dairy cases, it is imperative to offer products with an additional layer or two of nutrition to keep products relevant with today’s health and wellness shoppers. The most common extras include protein, probiotics, prebiotic fiber, omega-3 fatty acids, grass-fed dairy, and caffeine, as a natural form of energy.

Source: IRI data provided to Dairy Management Inc., courtesy of the Midwest Dairy Association

3. Less Sugars. Today’s shoppers are increasingly avoiding sugar in every shape and form. No high fructose corn syrup is basically a must in any better-for-you product if you want it to sport a healthful halo. Also very important are claims of less sugar, or even no sugar, for products designed to have keto diet appeal. And finally, formulating lactose free is proving to be a great strategy to keep shoppers in the dairy department.

4. Farm-to-Fork Story. Whenever you can bring the product back to the farm, do it. Be transparent when you can be traceable. This includes highlighting the source of all ingredients, not just the milk. This is everything from coffee and chocolate to fruits and spices. 

Source: The Hartman Group, as presented on March 28, 2019, at Trends and Innovations, A Sosland Publishing Seminar

5. Keep it Clean, Simple and Relevant. I’ve attended numerous educational conferences this month and the “clean, simple, relevant and TASTES GREAT” message is always emphasized. Dairy owns “tastes great.” If you are not working on the others, it’s time!

Concurrent with ProFood Tech, Sosland Publishing hosted its first Trends and Innovations seminar. When addressing the topic of what’s important to the health and wellness consumer, who, by the way, is a growing portion of the population, speaker Shelley Balanko, senior vice president of The Hartman Group, explained that the question modern wellness consumers ask these days is “What does this food do for me?”

“Progressive consumers are becoming savvy about choosing the right kinds of protein, the right kinds of fat and the right kinds of and amount of carbohydrates,” she said. “It has to taste good and be of good value.”

She went on to explain that while plant-based foods are dominating the conversation these days, “There’s still space for animal products, although specialized and regional,” she said.

She also predicts there soon will be backlash against some plant-based foods when consumers learn about how highly processed they are, along with the resources used in their manufacture.

Dairies would be smart to be prepared for this pending criticism of plant-based foods. Be ready to share your clean, simple, farm-to-fork story.

(Table source: IRI data provided to Dairy Management Inc., courtesy of the Midwest Dairy Association)

So how are retail dairy sales so far in 2019?

Unfortunately, 2019 milk sales remain in a depressed state, according to IRI data provided to Dairy Management Inc., courtesy of the Midwest Dairy Association.

About two-thirds of all channels were down 3% in the first month of 2019, compared to the same time period one year ago. Milk’s rate of decline steepened as 2018 progressed with full year 2018 sales volume down 2.8%.

Source: IRI data provided to Dairy Management Inc., courtesy of the Midwest Dairy Association

Growth pockets continue to be lactose-free milk and whole milk, with each posting continuous growth over many years. While still very early in 2019, flavored milk posted a small increase following a flat 2018.

It should be no surprise that milk alternatives remain strong, with almond the dominant force. Oat is likely right in tow. New players continue to emerge, with many dairies joining the movement.

Yogurt sales also continue to decline. The overall start to 2019 is an improvement over yogurt’s weak 2018 retail sales performance (-3.1%), with the most recent four-week period essentially flat compared to the same period a year ago.

Source: IRI data provided to Dairy Management Inc., courtesy of the Midwest Dairy Association

Contributions to this improved performance came from a number of areas, namely innovation in product and package. The whole fat segment continued to show strong growth at +10% for the four-week period ended Jan. 27, 2019. Whole fat growth can be tied to key consumer trends operating in the market, including consumers’ ongoing desire for whole, natural foods and a growing recognition among professionals and consumers that dairy fat can make positive contributions to health and wellness. Plain whole milk yogurt, as well as double and triple cream formulas, appeal to the growing number of keto dieters.

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