According to a hot-off-the-presses report from Mordor Intelligence, the global flavored milk market was valued at around $48 billion in 2015 and is expected to grow about 4.2% annually from now until 2020. This growth is being driven by unscheduled eating habits due to busy lifestyles and increased demand for convenience foods. The rising health consciousness of consumers is also helping the growth of this market, as flavored milk contains many nutrients, including protein, calcium, potassium and magnesium.
In developing markets such as Brazil, China and India, urbanization is another major driver of this market, as the increasing per capita income, along with changing consumer preferences, boosts the demand for flavored milk. However, substitutes like soft drinks and plant protein drinks pose a major threat to the market. Innovation helps the fight against the substitutes market; hence, processors are introducing new flavors to attract customers, according to Mordor Intelligence.
Chocolate-based milk beverages lead the market, followed by fruit-based flavored milk, with the latter being so much more than the strawberry flavor that has long been popular in the U.S. and Europe. Apple, banana and even orange are flavors driving innovation.
The Asia-Pacific region leads the global flavored milk market with more than 60% share, regarding revenue, followed by North America. The market is expected to grow further in Asia-Pacific, due to high milk production in the region. China takes the largest market share, regarding revenue, followed by the U.S. and India. However, the market is expected to grow at a steady pace in South America and parts of Asia, according to Mordor Intelligence.
The flavored milk market is as dynamic as the rest of the overall beverage business. The overarching trends of less sugar, simple labels, higher protein, nutrient density and ingredients from sustainable sources can all be addressed by flavored milk products.
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Who is the largest consumer of flavored milk? According to Mintel’s Dairy 2016 Report, Millennials stand out as being the most active drinkers of dairy, with more than half of those surveyed saying they drink more than five types of dairy milk. For dairies, this trend marks an opportunity to launch new and different tasting milk beverages that appeal to the demand for variety as well as health and nutrition. Flavored milk options, such as drinkable breakfast beverages and post-workout drinks, have the potential to add variety and enhance the consumer dairy experience by offering taste, nutrition and convenience.
According to the Mintel report, two thirds of consumers agree that milk (67%) is naturally nutritious compared to 60% for dairy-alternative beverages. In addition, consumers are more likely to agree that milk is free of additives (81% vs. 62% for alternatives). What’s more, 86% of consumers view milk as fresh compared to 63% who agree dairy alternatives are fresh.
Positive attitudes toward milk’s freshness and nutrition is promising for the category as the top attributes consumers look for when purchasing milk are natural (43%) and vitamin/mineral content (34%), while one in five (21%) look for organic options, driven by 28% of parents. Furthermore, 82% of consumers believe milk offers a wide variety of flavors in comparison to dairy alternatives (61%). In fact, the flavored dairy milk segment posted 5% gains from 2014 to 2015, according to Mintel data.
“While consumer trends are not favoring dairy milk, brands have an opportunity to re-engage consumers by developing innovative offerings that focus on improving already favorable aspects such as taste profile and nutritional value. It’s also important for brands to highlight that dairy milk is not just beneficial for bone health, but may also provide other benefits for consumers’ overall well-being as compared to non-dairy milk,” said Elizabeth Sisel, beverage analyst at Mintel.
While total retail fluid milk sales are down 2%, flavored milk continues to be a bright spot, delivering an impressive sales lift of 7.4% thus far this year. What’s more interesting is consumers renewed interest in fuller-fat milks. Whole-fat milk retail volume sales thru August 7, 2016, were up 5% and have 34% share of market. This strong volume growth for whole-fat milk is being driven by homes with children, Millennials and Hispanics. Fat-free milk, on the other hand, is down more than 13%. Fat-free milk has historically been the preferred variety by Baby Boomers and seniors, who today are drawn to other beverages in the market, namely dairy alternatives.
The foodservice market is also a source of milk growth, primarily in the form of coffee. Specialty coffees such as lattes contain a serving of milk in each coffee serving, providing consumers with a treat, an energy boost and nutrition, according to IRI.
Here are 10 recent flavored milk innovations from around the world.
For starters, watermelon-flavored milk is something new to Asian markets, but quickly becoming a popular flavor. It tends to be made with watermelon juice extract and fat-free or low-fat milk for a lighter, more refreshing beverage to better compete with soft drinks and juices.
In the U.S., Dean Foods continues to grow its TruMoo brand with limited-edition flavors. Cookies ‘n Cream debuted during the summer months, while Orange Scream is being offered around Halloween. The TruMoo brand is all about being lower in sugar, as compared to other flavored milks.
Bam has launched two varieties—Banana and Chocolate—of flavored whole milk in the U.K. The grab-and-go shelf-stable milks are described as “made with real milk and no junk.” They contain no refined sugars, artificial flavors, colorings or preservatives, and are suitable for vegetarians.
The chocolate milk drink is made from whole milk, cocoa and honey. Banana is the same, except instead of cocoa, the drink contains banana puree.
Three sisters in South Africa established a Brown Swiss dairy farm in 2009 and today offer a varied number of indulgent dairy products made from the milk. They offer eight flavors of Deney’s Swiss Dairy Full Cream Milkshakes. The flavors are: Bubble Gum Gelato, Caramello Cream, Don Pedro, Heavenly Lime, Iced Cappuccino, Strawberry Ice, Swiss Chocolate and White Chocolate.
In the U.K., retailer ASDA offers a line of private-label flavored milks in traditional flavors such as Chocolate, Strawberry and Vanilla, as well as limited-edition indulgent options like Blueberry Muffin and Strawberry Shortcake. These colorful, flavorful variants use fruit and vegetable juices for color and natural flavorings.
Next, new FRijj MMMango & Passionfruit 40% Less Sugar combines two on-trend fruit flavors. The eye-catching packaging features the company’s recognizable 40% Less Sugar light blue swirl.
“The FRijj brand is loved by consumers and is bought by almost one in five U.K. households,” said Laura Sheard, head of marketing at Müller Milk & Ingredients. “We’re delighted to offer our consumers more choice and we expect these new flavors to be popular.”
Other flavors in the FRijj line include: Burst of Banana, Choc-a-Chocolate, Full-on Fudge Brownie, Mucho Cookie Dough and Seriously Strawberry.
Friesland Campina now offers no-sugar-added Yazoo flavored milks. The new 200-milliliter line comes in three flavors: Banana, Toffee and Strawberry. The company says it has found a way to use the sugar found naturally in milk to sweeten the milk so that it does not need to add any sweetener. Natural flavors assist with sweetness, too.
Daioni long-life (14-months unopened shelf-stable) flavored organic milk is low in fat and sugar content and contains only natural colors and flavors with no artificial additives or preservatives. It is fully compliant with the nutritional guidelines for schools in the U.K. with less than 5% sugar. Daioni long-life flavored organic milk is also available in Mainland China, Hong Kong and the United Arab Emirates. Flavors are: Banana, Chocolate and Strawberry.
Without a doubt, Müller Germany is one of the most innovative flavored milk marketers. For Halloween, the company has dressed up its single-serve bottle line in monster costumes. The flavors are: Banana, Cherry Banana, Chocolate, Nocciola Nut, Pistachio Cocos, Strawberry and Vanilla.
There’s also new limited-edition Banana Caramel in the premium line, and two seasonal fall flavors. They are: Chocolate Mint and Honey.
The Müllerfrucht Buttermilk line has four new winter flavors. They are: Apple Strudel, Orange Sanddorn, Pear Quince and Red Grape Blackberry.
Famous House offers Taiwan flavored milk in cans, 340 and 500-milliliters. The shelf-stable milks combine fresh juice with New Zealand powdered milk and come in four flavors. They are: Apple, Banana, Mango and Papaya. Current distribution is in Australia, China and the U.K.
Müller Germany has definitely made their point with their innovative milk flavours and the newest Seasonal flavours. I never thought I would be tasting a 'Chocolate Mint' flavoured seasonal drink and be absolutely loving it, but yet here we are.
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