The functional dairy market is projected to lift from $51bn to $79bn in the next decade, fuelled by increased health consciousness and demand for products that meet consumer wellness needs.
While dairy has been traditionally widely associated with digestive health benefits, demand for gut health products means that competition in the dairy space is hotting up – and brands need to look beyond traditional strategies to remain relevant.
Launching a probiotic yogurt is no longer enough in a category dominated by industry majors with deep R&D resources and strong retail influence: so new entrants now need clear scientific credibility and a differentiated proposition to gain traction.
US yogurt brand Sourmilk is among the challenger brands taking a science-first approach to product development.
Company’s co-founder Elan Halpern told us its product is “a probiotic supplement disguised as a yogurt”, highlighting that not all yogurt strains are made equal when it comes to health benefits.
“Strains that are found in yogurts aren’t necessarily probiotics,” Halpern said. “They are designed to make yogurt delicious, not have optimal health outcomes to your gut and immune system.”
To go beyond standard yogurts, Sourmilk uses a proprietary strain shown to boost oxytocin signalling in the gut, along with another clinically-studied strain that supports the immune system.
The type of milk that goes into yogurt also makes a difference nutritionally, she said. “If you’re sourcing organic, grass-fed milk, the nutrient density in that product is just incredible.”
This view is echoed by Tom Parker Creamery, a British dairy company that markets a category-first milk product formulated to support sleep.
Managing director Rob Yates told us the company wanted to focus on functionality beyond protein – and found a niche with its product, Bedtime Milk. “We previously launched a vitamin-enriched milk and wanted to bring something that would be relevant to people that aren’t getting enough sleep.”
The drink combines four botanicals specially selected to reduce stress. “Milk has been used for centuries with sleep support, so by using these natural botanicals, we are going a step further,” he told us.
But dairy products formulated to aid relaxation are just the start, Yates thinks. “There’s plenty of scope for innovation in that space around more targeted, purpose-led innovation using familiar formats that feel intuitive, natural, and easy to incorporate [into diets].”
Sourmilk’s Halpern agrees. “Yogurt as a product has 92% household penetration in America – so our strategy is if to meet people where they are in their habits.”
So what’s next in the evolution of functional dairy?
Tune in to Positive Nutrition’s broadcast on Thursday, March 5 to hear both interviews in full - and much more beyond.
You’ll also gain insights from dairy majors Bel Group and Yili; explore the role of bioactive proteins such as lactoferrin, and discover the trends shaping the future of the category.
Register for free to join us on the day or watch the recording whenever it suits you.