Opportunities in Functional Milk-Based Beverages

What many of you are doing to sell more fluid milk is not working. Volume sales continue to decline. In my 23 years of writing for the dairy industry, I have never once written that milk consumption has increased. It is time to be proactive.

This week I read an article about small-batch milk selling for the equivalent of $14 a gallon. To read the article in the New York Times, link HERE. Photo source: MilkPEP


According to the author, many restaurant menus have started citing the provenance of their dairy products, including fluid milk and creamer, in the same way they boast of grass-fed rib-eye steaks and hydroponic tomatoes. And consumers are willing to spend more for boutique milk at farmers’ markets and upscale grocers. At Whole Foods Markets nationwide, sales of grass-fed cows milk—much of it locally produced—have experienced “high double-digit growth during the past two years and will likely increase in 2016,” said Julie Blubaugh, the manager of local products for the company’s Midwest division. That surge is even more remarkable given the long slump in overall milk sales. Annual fluid-milk consumption has fallen to 159 pounds per person in 2014, from 247 pounds in 1975, according to data from the USDA.

The fluid milk industry might just be ready for the small-batch, locally made, artisan trend that has hit everything from beer to chocolate to potato chips…and is quite successful in other dairy categories, namely cheese, ice cream and yogurt. Why not fluid milk?

The reality is that the low wholesale price of milk has left many mom-and-pop dairy farms struggling. Millennial entrepreneurs who embrace crafted foods and customization are seeing something you, your dad and his dad did not see: Milk can be so much more. This is not your daddy’s dairy any more. We do not consume the way we once did. Only the foods that adapt to consumers’ evolving on-the-go, better-for-you, better-for-the-world and story-telling lifestyle will thrive. Innovators are embracing boutique, high-end dairies and see them as a lucrative niche in a tough market.

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

The days of the all-you-can-eat low-budget buffets are gone. Millennials and the cohort of people born after them, Generation Z, which includes my two sons, are demanding consumers. This became very apparent this past week when I went on two college tours with my 10th grader, first to the University of Wisconsin-Madison and then to my alma mater, University of Illinois-Champaign Urbana. The dining rooms in the residence halls look like upscale restaurants. Though still cafeteria style, with Wisconsin having a pay for what you take format while Illinois still has an all-you-can-eat approach, the foods and beverages offered all tell a story. If it’s not the source, then it’s the nutrition. And when students dine on their own dollar on campus, they are going to cafes serving artisan and locally sourced products. These are young adults with an affinity for what they believe to be the best. This will not change. The milk industry needs to change.

The time is now to design milk beverages to speak to the needs of Millennials and Generation Z. Organic, lactose free, omega-3, grass fed…this is what they want. Extra vitamins and minerals, refueling and preventative…these are attributes that will get consumers to buy milk. Smaller-sized packaging for on-the-go convenience as well as delivery of nutrients is key. Adding value is paramount.




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

To read an article I wrote earlier this year for Food Business News on “Boosting the Nutrition Profile of Beverages,” link HERE.

Check out this new product in Austria from Seifried. Vita Plus D3 Vollmilch Länger Frisch is a long-life whole milk characterized by a comprehensive health-related added value. Its story is that it will help strengthen overall well-being. The milk is enriched with vitamin C for immunity and vitamin D for healthy muscles, bones and teeth. This milk also contains added omega-3 fatty acids EPA and DHA. DHA contributes to the development and function of the brain and nervous system. Specifically, it is essential for brain development in infants and toddlers, as well as visual function and cognitive health throughout life. EPA plays a crucial role in promoting cardiovascular health and safeguarding the body’s cells and joints.

In Russia, there’s new TH True Milk Phytosterol Fortified UHT Milk, which is said to reduce cholesterol levels and be good for the heart. According to the manufacturer, this milk comes from well-treated cows who listen to music, drink clean water and bathe every day. (Millennials and Gen Z love hearing this stuff!) The company also offers TH Top Kid, which is formulated for the nutritional needs of children ages 1 to 6 years. The formula contains DHA, and an array of other nutrients, including vitamins B, C and D to enhance immunity and support brain function.

Need some milk innovation? Plan to attend the International Dairy Foods Association Milk and Cultured Dairy Products Conference May 24 to 25 in Indianapolis. For more information, link HERE.