Real Dairy Remains Relevant to Today’s Consumers. Let’s Keep up the Momentum.

 

There were more than 1,200 exhibitors and an estimated 20,000 attendees at Natural Products Expo East 2022 this week in Philadelphia. Informa Markets’ New Hope Network hosts this annual event. 

Key trends observed on the expo floor and insights heard during the education sessions present numerous opportunities for dairy marketers to invest in efforts to keep dairy relevant with today and tomorrow’s consumers. And, when you remove fluid from the equation, there were more dairy-based cheese, ice cream and yogurt brands than plant-based alternatives at the expo. That’s correct. Real dairy—value-added and premium-positioned products—rocked Natural Products Expo East 2022. 

The New Hope Network Trend Framework identified the top trends at the show. They originate from these three cultural forces that are the most relevant to shaping the future of natural products: “Purpose-Driven Commerce,” Holistic Health and Well-Being” and “Modern Life.”

“New Hope Network is on the front lines of the natural products industry and offers a unique point of view when it comes to identifying trends that will be most impactful to the future of the industry,” said Jessica Rubino, vice president of content at New Hope Network. “This year, we’re pleased to see that CPG companies continue moving the natural products industry forward as they leverage innovation as a force for good.”

The U.S. natural and organic products industry grew an estimated 7.7% to $272 billion in 2021, with sales on track to surpass $300 billion by 2024 and $400 billion by 2030, according to New Hope Network’s State of Natural and Organic. While growth slowed in 2021, it was higher than the industry saw pre-pandemic.

Food and beverage momentum, specifically, continued throughout 2021, driving nearly 70% of industry sales. Natural, organic and functional food and beverage sales grew an estimated 7.1% to $186.5 billion in 2021, with sales on track to surpass $220 billion by 2024. Organic food and beverage grew an estimated 2% to $48.7 billion in 2021, as industry ups its focus on climate-friendly supply.

That brings us to the top-food trends. 

Regenerative agriculture has become the poster child helping to mitigate climate change. The problem is that without clear definition, the term is at risk of greenwashing or being another ill-defined “natural.” This trend is about how companies are obtaining third-party validation, achieving seed-to-shelf traceability and forging powerful partnerships to amplify their efforts. 

A recent study from New Hope Network showed that only 19% of surveyed consumers knew the term regenerative and knew what it meant. Two out of five (44%) surveyed said they never heard of it. 

Regenerative agriculture is one of the dairy industry’s stories to tell. This presents an opportunity. 

Neutral Foods received the Natural Products Expo East 2022 Nexty Award for being the Best Planet-Forward Product. The company produces milk and creamer that helps fight climate change. Neutral Foods was founded in 2019 in Portland, Oregon, with a mission to reduce the carbon footprint of agriculture. The company works with dairy farmers to implement a number of strategies to drive down the carbon emissions of milk, and what can’t be reduced is offset through the purchase of carbon credits from U.S. dairy farmers who turn cow emissions into renewable energy. 

Consumers seek brands focused on sustainability, effecting climate change. Brands are doing much to reduce their environmental footprint and transform their business models. But developing the sustainability plan is only part of the challenge. This trend explores how companies are communicating efforts to effectively educate consumers and increase demand for planet-friendly products. 

The CPG industry’s future is very much rooted in how companies partner to drive innovation, increase brand awareness and amplify positive impact. As a result of collaboration, the industry is making meaningful progress in waste reduction, sustainable packaging and regenerative agriculture. 

Consumers find joy through empowerment. As people strive to regain control of their lives, happiness and love have become intrinsically linked with empowerment. Supplement and functional food and beverage companies are embracing this message as they deliver positive health results and connect emotionally with their customers. This trend highlights how companies use messaging like “inner love,” “good vibes” and “radiant glow” to communicate the benefits of products such as immunity shots, energy snacks and beauty chocolates. 

Consumers most concerned about harmonious mood. Given the state of affairs over the past few years, it’s no surprise that the leading cognition condition appealing to consumers today is mood. This trend explores the sales boom of products addressing mood, adrenals, stress and sleep, which have all increased 100% since the COVID-19 pandemic started. 

The Expo East 2022 Nexty Editor’s Choice Winner was Clover Sonoma for its Golden Moon Milk. This product speaks to the empowerment and harmonious mood trends. 

As the first dairy in the U.S. to become American Humane Certified, Clover Sonoma is no stranger to doing things right. As a Certified B Corporation and member of the OSC2 J.E.D.I Collaborative, Clover Sonoma uses business as a force for good, while delivering exceptional dairy products. The winning Golden Milk is one of three Organic Moon Milks the company introduced earlier this year. 

Steeped in ancient Ayurveda, one of the world’s oldest holistic healing systems, Clover Sonoma’s Moon Milks blend 2% organic milk with herbs and spices. The three varieties are Golden Moon (Turmeric Ginger), Blue Moon (Blueberry Lavender) and Pink Moon (Cherry Berry Hibiscus). The soothing botanicals infused in all three flavors of Moon Milks can help promote relaxation and wellness throughout the day and can be enjoyed cold, warm or in a variety of recipes. 

Mintel named Moon Milks as one of the “Three Drink Trends to Watch Out for in 2022,” stating “over the course of the pandemic, the home has become the center of life, including work and relaxation. As a result, consumers are increasingly looking for rituals combining experience with indulgence and comfort.” 

Putting the “I” back into personalized nutrition. Intuitive eating and individual health markers, plus values-based decisions, make it harder to put consumers in a box and blur the lines of food’s future. Though specific diets haven’t totally disappeared, consumers are increasingly embracing the nuance and individuality of nutrition. This trend manifests in product marketing and positioning less tied to a defined eating regimen and more focused on product benefits and healthful ingredients.

Plant-based brands support environmental, animal-welfare concerns. As the plant-based market evolves, many brands are digging in and standing out among a sea of veggie-ful options by illustrating how their plant heroes support big sustainability efforts. This trend proves that it’s no longer enough to just be animal free; the plant-based heroes of today and tomorrow are transparent about nutrient density, sourcing, water use, carbon footprints, supply chains and so much more. 

This evolution of the plant-based sector is not reducing consumption of real dairy. 

Cheese and Butter Keep Dairy’s Per-Capita Consumption on an Incline. 

Preliminary USDA data show that domestic use of butter and cheese reached records in 2021. Though other dairy products have had their ups and downs (mostly up), for the past decade butter and cheese have been “old reliables,” with neither ever seeing consumption decline a single time. Their rising popularity has offset drops in fluid milk consumption (the typical, and inaccurate, trope that anti-dairy activists use to pronounce death upon the industry) and is a big part of the industry’s continued success and bright future.  

Dairy, as an industry, is in constant evolution, from advances in science to innovations in sustainability. But throughout, “bring on the butter” and “more cheese, please” have been continual refrains. The data shows it, and there’s no reason think those words won’t echo for years to come, according to National Milk Producers Federation.

Butter Boards and Charcuterie Concepts 

Charcuterie concepts—meats and cheese, along with other goodies—as well as butter boards are predicted to be the big hits this holiday season. Butter boards are going crazy on social media and are even being called the “new charcuterie boards.” They include a range of butters with varied toppings—included flavored sea salts--and carriers, everything from breads to dippers. 

Don’t let these opportunities to keep dairy relevant with consumers slip by. The time is now to get innovative. 

 

Adulting (noun): the practice of behaving in a way characteristic of a responsible adult, especially the accomplishment of mundane but necessary tasks, such as paying bills, cleaning house and cooking meals. Those responsible actions provide permission for the person to be a bit carefree in terms of what others think. That includes enjoying ice cream whenever and wherever. And marketers are responding with flavors and formats geared to adults. 

Research by Synergy Flavors shows that 98% of adults claim to have indulged in ice cream over the past six months, as compared to only 26% of children under 18 doing the same. The key here is the word “indulge.” And that’s why brands have started focusing on adult-themed ice cream innovations.

“Sales of ice cream and frozen novelties remain elevated far beyond the pre-pandemic baseline, though they have entered a period of stabilization as consumers eagerly return to out-of-home experiences and manage soaring grocery spend,” says Sydney Olson, food and drink analyst at Mintel and author of “Ice Cream and Frozen Novelties, US-2022.” “Exciting flavor profiles, snackable formats, premium concepts and experiential tactics can keep consumers engaged, justify higher prices and fend off returning parlor/shop competition.”

Mintel’s research shows that more than half (54%) of U.S. adults agree there is nothing wrong with eating indulgent food. The same portion agree indulgent foods can benefit your overall health. This finding foreshadows the future of frozen treat brands by highlighting a shift away from dated and restrictive definitions of health and towards the importance of decompression, connection and enjoyment that ice cream can facilitate.

Of those surveyed by Mintel, 62% say flavor is the most important factor when buying frozen treats from the store. It’s also important to note that ice cream consumers are not brand loyal and winning market share depends primarily on the execution of flavors.

Soaring grocery prices can be especially threatening to discretionary and impulse-driven categories such as frozen treats, according to Olson. Even so, premium is the leading concept that would motivate frozen treat shoppers to buy more. This indicates inflationary prices will lend to a “less-but-better” approach to treating.

Further, at-home lifestyles broadened what kinds of foods can be considered a snack, creating greater access to categories such as frozen treats that were previously ruled out due to lack of shelf stability and portability, according to Mintel research. Snacking innovation opportunities include bite-sized formats, single-serve containers and ready-to-drink milkshakes and ice cream in pouches.

This is something that Gelatys is embracing. The company now offers Gelato Bites, which are bite-sized balls of gelato that may contain a filling or be enrobed in a decadent coating, or both. Examples include Dulce de Leche gelato filled with dulce de leche and then dipped in milk chocolate and Pistachio gelato filled with chocotella and dipped in milk chocolate. 

Del’s Dairy Farm is a farmstead small-batch ice cream company located in New York’s Hudson Valley. The company offers a range of adult-centric flavors including Coffee Toffee, which is robust and bright coffee ice cream with toasty toffee bites, and Lavender Honey Blueberry, which is lavender-flavored ice cream sweetened with New York State honey and ripples of bright blueberry jam. The latter speaks to the growing number of adults who are hungry for physical, spiritual and emotional gratification. 

“The pandemic amplified loneliness,” according to Eve Turow-Paul, author of “Hungry: Avocado Toast, Instagram Influencers, and Our Search for Connection and Meaning,” and executive director of Food for Climate League. “People are looking for control. They are turning to food to fulfill those unmet needs. You cannot ignore the fact that people are in crisis.

“Food is home,” says Turow-Paul. “Food is comfort, and we can really use food to create that sense of purpose and meaning in our lives.

“There’s never been a more important time to work in the food space,” she says. “Food is our answer to the climate crisis, as well as mental health and well-being.”

Ice cream, along with other dairy products, can do all of this. 

According to Dairy Management Inc., research shows there’s a heightened emphasis on mental and emotional wellbeing, and consumers are looking for products that calm. There is projected growth associated with products that calm, and these benefits are of particular interest with Gen Z consumers, those who are fresh out of college and have started adulting.  

Research shows that among dairy consumers, 22% use dairy products to calm themselves and 24% are currently not using dairy products to calm themselves but would like to for this benefit. Creaminess is a key attribute across all dairy categories that consumers crave for calming products, according to MaryAnne Drake, director of the Southeast Dairy Foods Research Center, and professor at North Carolina State University. 

In addition to ice cream being able to calm, innovative flavors based on global cuisines help adults escape reality, which assists with satisfying their emotional appetites. That is something Alec’s Ice Cream provides. 

In addition to providing an array of adult-centric flavors, Alec’s Ice Cream also speaks to the emotional hunger that comes with adulting, especially when trying to think of the future. The company uses the world’s only certified regenerative organic A2 dairy and carbon-neutral regenerative cane sugar. 

“They come from good places, do good things for our planet and make taste buds feel extra good, too,” according to the company. 

Unilever “warms” up freezers to help fight climate change.

Unilever’s Climate Transition Action Plan sets out the steps the company will take to reduce emissions to zero within its own operations by 2030 and to net zero across its value chain by 2039. 

Roy Horne, head of climate action for the ice cream business group at Unilever explains why the frozen food industry needs to take action to reduce its carbon footprint, and how warming up the cold chain will be a key part of the process.

“The cold chain is everything involved from the ice cream being churned in our factories, right the way through to the point you or I take it out of the cabinet or out of our home freezer,” says Horne. “All the way through it needs to be maintained at an average temperature of -20°C. So that involves refrigerated storage. It means refrigerated trucks, it means refrigerated sales cabinets, it means home freezers. It’s the whole process that requires refrigeration.”

Ice cream has historically been stored at around -18°C. A few years ago, some of Unilever’s research and development team began challenging that temperature. This led the company to investigate the possibility of changing the product to increase the supply chain temperature to save energy. 

To read more, link HERE. 

Putting Plants—and Cellular Science--into Perspective for Die-Hard Dairy Folks

 

After attending back-to-back expos over the past 10 days--Plant Based World Expo in New York City and the International Whey Conference in Chicago—followed by serving as a judge for the Private Kitchen Pitch Contest presented by Midwest Dairy and The Hatchery Chicago, I think it’s important to take a step back and review what the majority of authorities in agriculture accept as fact. This will help all of us figure out how the industry can work together to prevent global famine in the next 30 years. 

Fact 1: New and more sources of protein are necessary to prevent malnourishment. While calories, namely from carbohydrates, may thwart starvation, protein is crucial for the body to thrive. And, it is impossible to feed the growing population enough protein when the only source is animals. Plant proteins are part of the answer. Precision fermentation dairy and cultivated meat cells will also likely be part of the answer. 

Fact 2: Agriculture is a big part of the solution to the climate crisis. Livestock is critical to soil health and healthy soil is required to grow nutrient-dense plants. Livestock is not going away.

Fact 3: The majority of consumers still eat animal products. While many may identify as being flexitarian and strive to consume fewer animal products, dairy, eggs and meat remain a part of the diet.

Fact 4: Plant-based milks have become another beverage option for consumers. They are here to stay. 

Fact 5: Here’s the most important fact to understand. Plants, plant proteins and animal food alternatives are three very different things. 

Let’s dissect that statement. Edible plants are whole fruits, vegetables, grains, nuts, seeds, etc. These have long been lacking in many consumers’ diets. In general, we need to eat more plants in their minimally processed formats. 

Proteins—from all sources—are polymers of amino acids. The amino acids—some essential to the human diet—are linked together by peptide bonds to form polypeptide chains. Those chains get twisted together into complex three-dimensional shapes known as protein. 

In general, whole plants are low in protein content. Thus, plant proteins are isolated from plants and purified into various concentrations for use in food and beverage innovation. Animal proteins, too, may be isolated from animals; however, whole animal products, everything from a glass of milk to an egg to a steak, are high in protein content. The world needs all of these forms of protein to prevent famine. 

Then there’s animal food alternatives. Market research firm SPINS, Chicago, says vegan alternatives to animal-based products are what the term “plant based” should refer to; however, the term has gotten diluted over the past few years. While these products are not going away any time soon, this is not where innovators should be focused, in my opinion. The focus should be on developing creative, delicious and affordable ways to consume plant proteins, with or without animal proteins. Beverages, bars and snacks are the most obvious applications. Many have been combining proteins for years.

The Bolthouse Farms Protein Plus Shake, for example, contains 30 grams of protein from reduced-fat milk, soy protein concentrate and whey protein concentrate per 15.2-fluid-ounce bottle. The company explains on the side panel that “whey is absorbed quickly to satisfy immediate nutrition needs while soy protein absorbs at a lower rate for sustained benefits.”  

At Plant Based World Expo, Yangyoo, a food tech company based in Seoul, Korea, showcased its vegan cheeses. The almond-based products come in slice, shred, spread and cube formats. It is the cube format that caught my eye. Intended for snacking, the cubes come in sweet and savory flavors, including blueberry, chocolate, citron, garlic herb and jalapeno, along with plain and cheddar. Why even call them plant-based cheese? Why not protein cubes? Snack cubes? Why not combine proteins for a real powerhouse product?

New York-based Mighty Yum also made its debut at the expo. Created by two health and fitness entrepreneurs inspired to transform how families eat on the go, Mighty Yum is the vegan form of kids’ lunch kits. Varieties include plant-based versions of turkey and cheese, ham and cheese, and pepperoni pizza. But why mimic luncheon meat and processed cheese, two foods already perceived as being overly processed? Is there some other format of a protein food that could be part of such a lunch kit? 

That brings me to the Thursday afternoon Private Kitchen Pitch Contest that took place at The Hatchery Chicago. More than 50 entrepreneurs entered the contest sponsored by Midwest Dairy, a non-profit supporting farmers to highlight dairy products. Entries had to use 25% or more of cow’s milk dairy in the finished product submitted to the contest. This included milk, cheese, yogurt, butter, etc. The winner will receive six months of free rent in one of The Hatchery’s private commercial kitchens along with other startup support. 

And the winner (of five finalists) was: Twisted Eggroll. Here’s why. Twisted Eggroll is a frozen packaged product that approaches the traditional egg roll with an infused spin. They eggrolls are made with three dairy ingredients: cheese, butter and milk. There’s also real egg in the eggroll. And some versions contain plant-based protein in the form of beans. Savory varieties are Buffalo Chicken, Cheesesteak and Veggie Southwestern. There’s a new sweet option: Apple Cheesecake. 

The founder, Nikkita Randle, a Chicago native, described her product as being “made for and with dairy.” In fact, her product would not exist if it did not contain dairy. The dairy ingredients, meats and beans bring a lot of protein to this unique format. Also, eggrolls are not associated with containing dairy ingredients. The judges felt this innovation was an amazingly delicious way to increase consumption of dairy. A new product, a new concept, loaded with dairy protein and a touch of plant protein. But it is this type of innovation that could be the perfect canvas for bringing animal and plant proteins together to feed the world. 

Think about it. 

Plant Based World Expo’s Keynote Inspires Dairy Innovation

 

(All graphs are courtesy of Dairy Management Inc.)

It’s been a busy few days in New York City while attending Plant Based World Expo. Here are seven key observations and comparisons between this third installment of the expo and the second one back in December 2021. 

1. Last year there were more than a dozen processors showcasing their plant-based version of chicken nuggets. This expo had fewer than a handful. 

2. None of the big-name plant-based meat players exhibited and on the dairy side, the only big player exhibiting was Miyoko’s Creamery. There were some middle-tier players, but the rest were new players trying to make a name for themselves in the plant-based space.

3. There may have actually been more ingredient, package and process suppliers exhibiting than plant-based food and beverage manufacturers. While plant-protein suppliers make sense in this space, not sure why vegetable oil and phosphate companies felt the need to be here. 

4. Many of the processor exhibitors sampled concepts that have always been plant-based products, such as nut butters, trail mix and puffed corn snacks. 

5. The conversation during a number of presentations focused on the fact that taste reigns when it comes to plant-based meat and dairy. In addition, the over processing and “unclean” labels of such products remains a deterrent to purchase for flexitarians; lack of adequate nutrition, in particular quality protein content is also a deterrent; and finally, there’s not enough variety in these products. 

6. Plant-based milks are here to stay. They are part of every retailer’s lineup. And, according to Meghan Barton, director of frozen for Kroger, they are a point of entry for consumers into plant-based eating. 

“Duplication among brands is something to be mindful of,” she said. 

Rodd Willis, director of natural and specialty for Dot Foods, said that if he was an innovator wanting to get into the plant-based space, he would do it in frozen, convenience meals. 

Barton concurred, adding that she would like to see more vegetable-forward options. “I want to see the vegetables,” she said.  

Kate Holmstrom, director-business acceleration consulting for 84.51, Kroger’s research business unit said consumers don’t want to be bored with more plant-based options of the same product. She also said that Kroger’s research showed that shoppers who have increased their purchase of plant-based foods have not eliminated animal-based products from the shopping cart. It’s mostly incremental growth for the stores. 

7. Here’s where it gets really good for dairy. Eve Turow-Paul, author of “Hungry: Avocado Toast, Instagram Influencers, and Our Search for Connection and Meaning,” and executive director of Food for Climate League, kicked off the expo as the keynote on Thursday. She explained how 21st-century innovations and pressures are redefining people’s needs and desires, and how this has fueled the foodie culture. In her presentation (and book), she weaves together evolutionary psychology and sociology with captivating investigative reporting from around the world, and reveals the modern hungers—physical, spiritual and emotional—that are driving today’s top trends, including plant-based foods. 

She explained how the youngest generations are the most anxious, lonely and tech-savvy consumers, and how they have found food to be one of the few things they can control. This is much like the fuel that inspires an eating disorder. 

Prior to the pandemic, she conducted the Hungry Study with Datassential. Of the 1,100 Americans surveyed, 84% of Gen Z and 86% of Millennials said they were passionate about food. Almost 60% of Gen Z and Millennials agreed or slightly agreed that their anxiety level is high, while Gen X was at about 55% and Baby Boomers were at about 35% in agreement.

Since the pandemic, these numbers are likely all much higher. To many, the world seems unmanageable. 

“The pandemic amplified loneliness,” she said. “And food is a way to belong to a community.

“People are looking for control,” she said. “They are turning to food to fulfill those unmet needs. You cannot ignore the fact that people are in crisis. People want to know more about who is growing their foods, where they’re growing it, how they’re growing it.”

With younger people glued to their phones and many lacking deep, in-person relationships, they are looking for a sense of community through food. People are identifying with others through diet tribes, and that’s part of the fuel behind the plant-based movement. It’s also part of the fuel behind do-it-yourself projects, everything from baking to gardening, and a renewed interest in crafts, everything from coloring books to crocheting. These things provide a sense of accomplishment, which in turn provide comfort.  

“Food is home,” said Turow-Paul. “Food is comfort, and we can really use food to create that sense of purpose and meaning in our lives.

“There’s never been a more important time to work in the food space,” she concluded. “Food is our answer to the climate crisis, as well as mental health and well-being.”

Dairy foods can do all of this. It was very timely that Dairy Management Inc. (DMI), announced the same day that Turow-Paul spoke that its New Product Competition will focus on dairy’s qualities related to calming. The program is open to U.S. undergraduate and graduate students to develop products in line with industry and consumer insights to uncover innovative dairy-based products that offer calming benefits. 

DMI concurs that research shows there’s a heightened emphasis on mental and emotional wellbeing, and consumers are looking for products that calm. And, there is projected growth associated with products that calm, and these benefits are of particular interest with Gen Z consumers. 

Research shows that among dairy consumers, 22% use dairy products to calm themselves and 24% are currently not using dairy products to calm themselves but would like to for this benefit. Creaminess is a key attribute across all dairy categories that consumers crave for calming products, according to MaryAnne Drake, director of the Southeast Dairy Foods Research Center, and professor at North Carolina State University. 

To read more about the health benefits of dairy--beyond being a nutrition powerhouse--link HERE. 

The competition provides a platform for students to bring their knowledge and expertise to dairy product innovation. Students can integrate their work on product formulation with packaging, pricing and marketing to create a product that meets consumer needs.

Successful entries will meet competition criteria, demonstrate innovation and provide value to consumers. The judging panel includes experts from across the dairy industry and winning teams will be recognized at the Institute of Food Technologists’ annual meeting in Chicago next July. The winning team will earn $8,000 with second place receiving $5,000 and $3,000 going to third place.

The deadline for submissions is Jan. 16, 2023. For more information, link HERE.

Today’s blog sponsor, Idaho Milk Products, is one of the sponsors of the competition. Thank you for fueling dairy product innovation and keeping it relevant to young consumers.

And here’s an example of a commercialized dairy product designed to calm. Clover Sonoma, a third-generation family-owned and operated dairy and Certified B Corporation, took its brand nationally earlier this year with a first-of-its-kind dairy beverage: Organic Moon Milks. 

Steeped in ancient Ayurveda, one of the world’s oldest holistic healing systems, Clover Sonoma’s Moon Milks blend 2% organic milk with herbs and spices. Available in quart size, Clover Sonoma Moon Milks debut at Whole Foods Market in three varieties: Golden Moon (Turmeric Ginger), Blue Moon (Blueberry Lavender) and Pink Moon (Cherry Berry Hibiscus). The soothing botanicals infused in all three flavors of Moon Milks can help promote relaxation and wellness throughout the day and can be enjoyed cold, warm or in a variety of recipes. 

In recent years, Moon Milks have become a do-it-yourself sensation on social media, given the photo-friendly bright colors, functional ingredients and relaxing tendencies and they are beginning to trend more broadly with consumers. This is what Turow-Paul talked about. Dairy can do this!