The dairy category continues to be driven by consumer trends across the board, and this is evidenced by the products we see on supermarket shelves. The ever-changing needs of today’s consumers play a huge role in the NPD and trends in the dairy space. During a live webinar broadcast on FoodIngredientsFirst this week, Innova Market Insights’ Director of Innovation, Lu Ann Williams addressed the top ten trends for 2018 in relation to dairy innovation and discussed how these trends would impact tomorrow’s dairy cabinet.

Mindful Choices

The first trend for 2018 is “Mindful Choices” which represents the evolutions of choice when it comes to consumer buying habits and this trend is certainly relevant in the dairy space. In a world wher we have more choice than ever, consumers are embracing healthy choices and taking full responsibility for their health and peace of mind. According to Innova Market Insights data, four in 10 US and UK consumers have increased their consumption of “healthy foods” (2017).

“It’s about body health and for the consumers’ peace of mind and finding the right balance,” says Williams. “Animal welfare has become a big part of that, and it’s about feeling good about what you are consuming and the same time with positive environmental aspects, such as animal welfare.”

“There is a good example from FrieslandCampina in the Netherlands for yogurt (pictured, left), which on the packaging claims the yogurt contains protein, calcium and B12. Interestingly, it also states that the milk comes from cows who are outside for 120 days a year, and six hours per day in a meadow,” she says. “So most consumers would feel good about eating that type of product.”

According to Williams, environmental claims and sustainability in general, are moving into the mainstream.

Lighter Enjoyment

This trend can apply to many things within the dairy category. Williams believes that “lighter enjoyment doesn’t have to be full indulgent, and that there are many different ways to enjoy eating in variations of lighter enjoyment.” Indulgence is the ultimate aim, and there are many products on the market that represent this.

“Low-fat is one of the highest claims on pack for examples of ‘lighter’ trends in dairy applications,” she adds.

Positively Processed

Beyond fermentation, an increasing number of food and beverage launches tracked feature processing methods that might convey “more naturalness” and “more traditional” are finding space on the shelf. In dairy, this trend relates to popular healthy beverage kefir. Whether you pour it over your cereal, top it with fruit or drink it straight out of the pack, kefir drink is a thick, indulgent, cultured drink you can enjoy freely.

According to data from Innova Market Insights, 50 percent of consumers from the US, UK and Australia “consider a food or beverage product as being more natural if it has fewer ingredients on the ingredients list.”

Williams says: “Anti-processed has had a hold on the industry, now there are great opportunities to make the processing story a positive part of the message for consumers. Fermented foods have grown a lot in recent years, and the simplicity of the process does help to convey the story.”

Traditional and handcraft methods are prevalent for yogurt innovation, and the rise of craftsmanship and authenticity has been seen across the premium and indulgent dairy categories.

Going Full Circle

Awareness around packaging and food waste is on the rise, and the industry is responding. According to Williams, sustainability and ethical packaging are seen more often and more companies are also making that part of their story.

“The number of dairy launches has increased with this type of packaging or claims relating to sustainability. In a lot of countries, it is also required; we also see a lot of different ways to communicate this. There is more natural packaging on shelves, renewables, which help to lower the carbon footprints, upcycling and promoting the use of packaging for something else. There are a lot of nice ways to engage the consumer with the sustainable story to try to highlight the whole effort of going full circle,” she says.

Beyond the Coffeehouse

We all know from the past 20 years there has been a huge increase in the coffee culture around the world. Global growth in coffee and tea retail sales is mainly value driven, growing with a CAGR (’10-’18 forecast) of +4.6 percent and +4.4 percent, respectively.

One in two consumers from the US, UK and Australia want more fusion of flavors in their beverages, according to Williams and there is now much more prominence in tea blended with other flavors for a novel experience, such as tea & ginger and tea & spearmint.

Coffee and tea flavors growing favorably in dairy and we have seen a big increase in tea launches, says Williams. “There is still a lot of activity in these categories, particularly in flavor innovation; the value of sales is growing a lot faster than the volume which also tells you that there are a lot of value-added opportunities.”

Dining Out, In

Foodservice is increasingly in the hands of the consumer. Hobby chefs are opening up their homes for an intimate dining experience. Foodservice is meeting retail, with cafes and lunch diners popping up as in-shop concepts.

“There is now a blurring,” Williams notes, “To make more authentic foods at home. If you have friends round, there are premium options that you would normally only see in restaurants, but now you can have that same eating experience at home. Cheese innovation and cooking creams have been around for a while and there is lots of interesting innovation in this space. The idea of making new and different premium tasting types of foods at home means the cook is becoming more chef-like in their approach and there is a lot of opportunities for dairy when it comes to dining out in.”

From Snacks to Mini Meals
 

Dairy snacking is one of the most key areas, says Williams.

“We asked consumers when their food cravings are the highest and it wasn’t a big surprise that this was later in the day.”

“We see now products positioned around the snacking concepts, food-to-go, cereals, nut and seeds, croutons inclusions, for example. There are still many opportunities for snacking within dairy; snacking cheese is changing into new formats, and there are still a lot of opportunities for healthy versions like quark.”

These snacking occasions can still be very indulgent and can make you feel very full, they can be sweet or savory so there are many possibilities in dairy snacking that the consumer can choose from,” she notes.

Bountiful Choice
Beyond traditional market segmentation, Bountiful Choice relates to meeting consumers’ various demands around flavor, nutrition and visual appeal. Diversification to enhance differentiation is important in the dairy category and nowadays consumers expect a choice for everything.

“In mature categories, we know that in the US yogurt was the hottest category and now it is declining, it’s important when it comes to mature categories like this to look at variety and novelty. The results of a consumers study revealed that 34 percent of German consumers who have increased their yogurt consumption say so because there are more variety and novelty.  Consumers expect a lot of choices especially in mature categories, and that can be a way to create some new growth in a new category,” Williams concludes.