Canadean has quantified 2017 predictions within the dairy market using its consumer reports survey data, market data and Product Launch Analytics database (PLA) to identify opportunities and respond through innovations in formulation, packaging and positioning.
Canadean’s Q3, 2016 Global Consumer Survey found that 27% of consumers are trying to eat as much calcium as possible, while a further 42% aim to eat a moderate amount.
Specific health requirements
Growing consumer interest in the actual and perceived health benefits of dairy consumption is driving growth among specific age segments, most notably kids and babies, and older consumers.
These groups are more likely than others to have specific health requirements, and will consume dairy products that meet their individual needs and dietary requirements.
This may include reduced cholesterol and saturated fat, or added calcium and magnesium options.
Kids and babies and older consumers are important demographics for dairy, as these two age segments account for 17% and 20% of dairy consumption respectively.
‘Reduced’ and ‘added’
A concern for ‘reduced’ and ‘added’ options will feature heavily in 2017, as consumer needs become increasingly specific and individualized.
Regulating digestive and immune systems: High in antioxidants and encouraging a healthy digestive and immune system, the presence of Aloe vera in this yogurt appeals to consumers seeking to improve digestive health. 2017 will see growth in demand for utility products which have been tweaked to offer health benefits.
Health claims will filter down from more established segments, such as drinkable yogurt and soy, and begin to feature in other dairy segments, which are also high in calcium, potassium and vitamin D, such as cheese and milk.
Dairy producers and retailers must work to extend the appeal of less specialized dairy segments to a broad range of consumers concerned with health and digestion.
There is a growing perception among consumers that artificial additives and preservatives are harmful to health, with 75% of consumers agreeing with this statement (Q3, 2016). This growing concern for health can be seen in the market, as consumers limit their intake of sugar, fats, carbohydrates, gluten and artificial sweeteners, while increasing their intake of calcium and probiotics.
This concern for health extends to more nuanced benefits, with 45% of consumers interested in food or drink products that improve digestive system health and a further 40% interested but not yet actively buying (Q4, 2015).
Producers and retailers can expect demand for dairy products containing added ingredients to continue to grow in 2017, and should take a proactive approach when making claims about added nutritional content.
Dairy products have for some time been viewed as digestion and immune boosters, but increasing public awareness and growing interest in health and dieting mean that this trend will experience more significant growth in 2017.
A growing body of consumers seek dairy-free alternatives that allow them to live in accordance with specific dietary requirements and ethical principles; this is not exclusive to lactose intolerant and vegan consumers either, as growing availability has facilitated changes in taste preference and fad-diets.
Soy, rice and nut milk alternatives are becoming increasingly popular, although little has been done to target dairy-free consumers in the cheese category, where variety is noticeably limited.
In 2017, producers should witness an increase in demand for a greater variety of cheese alternatives, a product for which enjoyment outweighs practical necessity. The enjoyment principle is significant, for it points to consumers who like to try novel ingredients and products despite not being vegan, and who may wish to enlist the help of dairy-free alternatives in leading a healthier, more balanced lifestyle.
It also draws appeal from vegan consumers who do not want to give up eating a product despite not being able to enjoy the conventional version.
Clean label growth
Clean labeling, or consumer desire for simple products with no additives or artificial preservatives, is no longer a trend but a ‘must’ that consumers are asking for without having fully understood the meaning behind it.
As revealed by a recent Canadean survey, 34% of consumers do not actually know what “clean label” means. Of those who do recognize the term, it is associated with products free from artificial ingredients (36%), natural or organic (34%), or chemical/pesticide-free (31%).
"Cocoa, milk, sugar. Nothing else": Explicitly tagged as “cocoa, milk, sugar. Nothing else”, this release draws on the simplicity and “clean label” trends, attempting to build a healthier halo around a sugary beverage which may otherwise be perceived as unhealthy. This product launch targets the 85% of Turkish consumers who find the concept of products formulated with the lowest number of ingredients possible to be appealing.
Despite consumers’ uncertainty surrounding its meaning the demand for clean label and natural products continues to grow, with 45% of consumers now willing to pay a premium price for products carrying this specific tag.
The clean label approach should be undertaken as a strategic move to increase consumer trust and to mitigate brand risk where consumer perceptions of health change quickly. Packaging that clearly states that the product is clean label, while communicating what clean label means, will attract consumers who are unsure of how this claim addresses their specific needs.
As this trend is anticipated to see growth in 2017, producers should increase their focus on a “back to basics” approach in regards to product formulation, which aims to align their brand with the clean label trend and consequently drive sales within the dairy market.
The trend will expand more to feature natural and health claims, as 51% of demand for clean tags is driven by consumers actively purchasing products claiming to improve general health and wellbeing.
As 60% of consumers globally are willing to experiment more often with different flavors and ingredients, manufacturers must enhance the differentiation points of their product offering to overcome competition and drive consumption.
Providing new sensory experiences will entice 64% of consumers who ‘always’ or ‘often’ experiment with milk products, and 72% who experiment with different yogurt flavors. In spite of the immense popularity of fruit flavors in the yogurt category, a gradual movement towards savory combinations is under way.
Not only do savory yogurt combinations contain far less added sugar, but they also offer a new platform for consumers interested in flavor experimentation. Vegetables, nuts and herbs, for instance, pair well with yogurt.
Novelty will continue to drive consumer choice in the dairy category in 2017. Manufacturers should prove themselves to be ahead of the curve by including unusual flavors, such as coconut, in the milk segment.
Unusual flavors provide an effective way to attract consumers, but also to refresh some sluggish categories where reformulations are quite rare, as in the case of garlic and nut-flavored margarine.
Dairy producers should learn from successful NPD launches of novel flavors in other categories, such as Haitai-Calbee Confectionery Co. Ltd’s launch of Honey Butter Chips in August 2014. The product proved tremendously popular in South Korea and highlighted the importance to producers of flavor innovation and experimentation.
The analysis in this report draws upon primary consumer and industry research, including the Q3 global survey 2016 (conducted in July/August 2016 with 26,891 respondents across 36 countries) and the Q4 global survey 2015 (conducted in December 2015 with 27,185 respondents across 31 countries); as well as secondary research.
It draws on information from some of Canadean's 2016 dairy reports, including Top Trends in Dairy; Exploring the milk, yogurt, and cheese categories , and Global Dairy and Soy Food Report; Analysis of opportunities offered by high growth economies