Strategic advice for the food and beverage industry

A Swiss and Australian dairy snack whose time has come

oso1Blending dairy with grains is a fast-emerging, important and often overlooked area of new product development. It may be new in Europe and North America, but its business potential has already been proven by huge successes in Australia and New Zealand, where the concept is long-established, not to mention traditional products like bircher muesli in Switzerland.

A grain-dairy blend has advantages which make it perfect for the snacking needs of health-conscious consumers:

1. A more filling eating experience – which is particularly appealing to male consumers. In New Zealand the Mammoth yoghurt brand, which  combines a high protein dairy base – 15g per 100g – with buckwheat, quinoa, and barley. A major success in New Zealand, despite retailing at a 100% premium to the biggest yoghurt brand, it accounted for 26% of the growth in New Zealand’s yoghurt market.

2. Possibility of sustained energy marketing message. As the success of Belvita has shown, the sustained energy message is very interesting to consumers. Depending on the grain and other ingredients selected, the door is opens the door to using one of the claims approved by Europe’s demanding health claim regulator. Oats, for example, can make slow energy/healthy blood sugar claims. Inulin – commonly used in dairy products – is also now able to make such a claim.

3. Gluten-free. Selection of a grain such as quinoa opens the door to making a gluten-free claim. Gluten-free is not only of interest to people with coeliac disease but to a growing swath of consumers for whom it signifies “a healthier choice”. One company has told New Nutrition Business that 80% of the buyers of its gluten-free products are healthy people with no medical need for them.

At present this opportunity is largely being pursued by entrepreneurial start-ups. One of the many brand working to create this new market is UK yoghurt-and- muesli combination Oso Natural Fuel. As a self-confessed ‘fitness freak’, Oso founder Paul Hayes says he first came up with the idea for the oat and yoghurt blend while travelling in Australia and taking part in a variety of sports.

The basic recipe is relatively simple: oats (20% of the product), low-fat yogurt, fruit, apple juice and “a small amount of natural cane sugar” (total sugars are 8g per 100g). The apple juice plays a significant part in the overall consistency and accounts for 22% or 23% of the product. The concept is similar to a traditional, home-made Bircher muesli, in which the oats are soaked in apple juice, typically overnight, and then yoghurt and fresh apple are added before eating.

In the case of Oso, fruit is added in three different flavours: strawberry, raspberry and mango & passion fruit. This choice was determined purely by the most popular flavours in the yoghurt category, the company says.  Shelf life is 25 days and the 200g pots, presented in a printed sleeve, come with a spoon. The retail price for each 200g pot is between £1.29 ($2.12/€1.55) and £1.39 ($2.28/€1.67).

Based on oats’ good nutritional science and permitted health claim, the brand focuses on a ‘Natural Fuel’ message.  The strong sports and fitness branding on the website is in part about allowing consumers to feel they can choose when to eat Oso, he explains. “People may naturally associate it with breakfast, but it’s not specifically – or only – aimed at that market,” says the company’s founder.

Early stage on-the-go concepts like Oso are unsuitable for listings in mainstream mass-market supermarkets. But they are ideal for smaller city-centre stores, whose customers tend to be both more health-conscious and also in situations where they may have no choice but o find a healthy on-the-go snack. They also work well in petrol stations, airport shops and lunch cafes. “In Australia,” says Hayes, “those are the types of places where you’d see this kind of product.”

Because the idea of a grain-plus-dairy snack is still relatively new, in-store sampling is key to creating success. It is a vital tool in re-assuring people that something with which they are unfamiliar also tastes good.

Single-serve products which combine the “naturally healthy” virtues of dairy and grains are completely aligned with consumers’ needs for convenience, health (from “naturally healthy” ingredients) and indulgent tastes. They are an embryonic market that’s waiting to be developed and is neglected by everyone but a few entrepreneurial companies.  The evidence is that though the combination may be completely unfamiliar to consumers, once they have experienced the tastes and textures and the satisfying nature of such snacks, they become committed buyers.  At present many dairy companies are focused on split pots – dairy foods with the cereal in a separate cup that the consumer must mix in themselves. Most of them will find that in terms of profit margin, convenience and opportunity dairy-and-grain blends will be the bigger opportunity.


Posted in Editorial, Mainsite

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