Whats hot whats not in Global Dairy Industry?

An overview of the global dairy market and the trends that are transforming it

Innovation remains the lifeblood of increasingly saturated markets. And despite the global recession in 2008, there was a lot of movement in the dairy market. As would be expected, Western Europe led the way with 4,161 new dairy product launches in 2009, but there was also healthy innovation across many other regions, with 2,110 launches in Eastern Europe, 1150 in Asia, 1114 in Northern America and 892 in Latin America. Even smaller dairy markets such as the Middle East and Africa showed that innovation is alive and well, with 384 products launched in Africa and 351 launches in the Middle East.[1]

Drinking milk growth in Asia

Asia Pacific is the largest drinking milk region and also has the most interesting growth prospects. In general, drinking milk products are doing better in emerging than in developed regions, according to Euromonitor. Although it is predicted that there will be an estimated global compound annual growth rate (CAGR) of 1.9% between 2011-2014 in the drinking milk sector, the Asia Pacific region is predicted to have the largest CAGR during this period, with 3.5%. Western Europe is only predicted to have a CAGR of 0.2% in drinking milk, followed by the Middle East and Africa with a CAGR of 2.2%, Eastern Europe with 2.4% and Latin America with 2.8%.

Within the drinking milk category, the largest growth between 2011-2014, according to Euromonitor statistics, will be in soy beverages – with a worldwide CAGR of 4.2%. This is followed by flavoured milk drinks at 3.8% growth, flavoured powder milk drinks at 2.5%, milk at 1.4% and powdered milk at 0.7%. The addition of functional benefits to drinking milk products is vital in maintaining consumer interest in this mature market category.

Yoghurt packs a punch globally

Euromonitor statistics show that Western Europe is the largest market for yoghurt and sour milk drinks, followed by the Asia Pacific region in terms of both value and volume. However, it looks like there will be a power shift soon, with the Asia Pacific region predicted to have a CAGR of 3.9% between 2011-2014 in the mentioned category, as opposed to Western Europe, which is predicted to have a CAGR of just 1% during the same period. Latin America looks set for success in this category too, with a predicted 5.1% value growth, compared to 4.6% for the Middle East and Africa, and 3.6% for Eastern Europe.

Euromonitor also predicts that yoghurt will enjoy far greater global growth than sour milk drinks over the 2011-2014 period. Within the yoghurt category, however, the areas of least absolute value throughout the 2011-2014 period look set to be flavoured and plain spoonable yoghurts, with functional spoonable yoghurts the largest sub-category in terms of both absolute value and CAGR (6.9%) globally.

Trends and consumer interests

As innovation continues to drive growth across the regions, opportunities abound for food and drink producers who are willing to make the most of not only established, but also emerging trends in the dairy sector. Key drivers highlighted by analysts for new product activity in 2010 and beyond[2] include a ‘sense of simplicity’, ‘free from’ products and a continued focus on digestive health and weight management solutions. [3]

With reference to the key trends driving change this year, BENEO’s ingredients can help transform food and drink producers’ product potential. Its prebiotics, rice derivatives and sugar alternatives can be applied to a wide range of applications and offer numerous nutritional benefits. Furthermore, the ingredient supplier is renowned for its ability to provide customers with advice on regulatory affairs, as well as answers to technical questions, qualitative and quantitative market analysis, product development, analysis and optimisation, and marketing support – all according to the highest quality standards.

Digestive health & feeling the benefit

With ‘digestive health’ billed to be the mega-trend of 2010 and ‘feeling the benefit’ the most powerful marketing message[4], it looks like functional ingredients that can deliver ‘felt’ benefits will be highly sought after by dairy food and drink producers. A case in point is that of healthy dairy drinks, which have made up the majority of new product development launches in recent years. [5] In addition, as a functional leader, yoghurt is increasingly being used to communicate on-pack a wide range of claims, from ‘aids digestion’ and ‘maintains digestive balance’ to ‘helps with immunity’ and ‘strengthens bones’.

By incorporating modest amounts of BENEO’s inulin and oligofructose (commercially available as Orafti^® inulin and Orafti^® oligofructose) into dairy drinks and yoghurts, manufacturers can produce products which offer real benefits to the digestive health of consumers. With a regular intake of inulin and oligofructose (at levels of five grams each day), beneficial bifidobacteria are stimulated and increase in number by as much as five to ten times. The level of harmful organisms such as clostridia in the digestive tract is also reduced, while regularity is improved. Furthermore, the unique and patented form of BENEO’s oligofructose-enriched inulin (commercially available as Orafti^®Synergy1) has been proven to improve calcium absorption to increase bone strength.

Weight management

When it comes to weight management, yoghurt and milk drinks are predicted to become of increasing importance. The mantra ‘less is more’ (reduced calories, reduced fat, low sodium and less sugar) will still be the main theme of many new product launches; a good example of this is Danone’s Vitalinea fat free yoghurt, which combines low fat with a satiety message. Milk drinks are also becoming more functional in the area of weight management, with product launches like Slim Fast’s Hunger Shot Strawberry Flavour High Protein & Fibre low fat yoghurt drinks and Candia’s Silhouette Active flavoured low fat milk drink becoming more common.

There are a range of products promoting weight management with the use of BENEO’s inulin and oligofructose. There is mounting scientific evidence to suggest that inulin and oligofructose, as a single ingredient, can decrease energy intake after a meal and beneficially affect sugar and lipid metabolism. BENEO’s isomaltulose (commercially available as Palatinose™) is the one and only carbohydrate that provides the human body with complete energy over significantly longer periods of time than sucrose while having a minimal effect on blood glucose levels. Thus, since it gives balanced and sustained energy, it can also be regarded as a carbohydrate that provides “slow calories”. It is ideal for use in dairy food and drinks. Moreover, due to its low hygroscopicity, it is also suitable for instant products such as milk powder.

Sense of simplicity

Another trend that looks set to continue is that of ‘all things simple’ and ‘natural’. We are seeing the rise of additive- and preservative-free yoghurts, as well as the continued popularity of all things organic and natural. To ensure that a credible ‘natural’ message is being promoted in association with functional foods and drinks, producers need to choose their ingredients providers with caution. This is why BENEO for example is using only the purest of natural ingredients such as rice, chicory and sugar-beet.

‘Free from’

Although 2009 was seen as the year of ‘free from’, with many new lactose and dairy-free products making it onto major supermarket shelves, the ‘free from’ trend looks as strong as ever in 2010 as the ‘taking things out is beneficial’ message gathers momentum. Alternatives to drinking milk, such as goats’ milk-, soya-, oats- and rice-based products, are thriving and creative mixes of ‘free from’ and ‘health claims’ are also proving popular. An example here is Alpro Soya’s soy drink with inulin, which combines the messages ‘lactose free’ and ‘gut health’ for maximum marketing punch. 

The Manufacturer approach

As demand for functional products has increased over the years, so production and marketing has become more and more complex. Additionally, the current discussion about the impact of regulation shows how complex the interrelation of food and drink, nutrition, legislation and communication to consumers is. This means that reliable advice and sound information are more important than ever. The recently found BENEO-Institute facilitates the access for customers to the latest research in nutritional science, and can obtain advice on claims as well as regulatory matters. Thus, manufacturers are encouraged to take an innovative approach to functional foods.

Author: Tim Van der Schraelen, Marketing Communication Manager, BENEO and Koen van Praet, Managing Director, Beneo Asia.

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