The 10 Key Growth Trends in the Business of Dairy Nutrition

dairyktimageEvery two years we publish a detailed update of the Key Trends for the dairy industry. For us, a trend is only a Key Trend if it:

  • Drives growth
  • Will endure

If they can connect to the Key Trends, dairy companies have some good opportunities for profitable growth at good margins.

For example, as a result of new science about dairy’s health benefits, in some markets the most health-informed consumers are buying more full-fat products while sales of low-fat are flat or falling. In the US market, for example, the volume of whole milk sold at retail grew 5.5% in 2016 and the volume of zero/low-fat milk fell by 5.1% (IRI).

Cheese is one of the biggest beneficiaries of the science-based re-birth of dairy: There no negatives associated with cheese from the fat or sodium and it actually confers some health benefits.

Snacking is the biggest growth opportunity for cheese and a few companies are already getting more sales at higher margins from focusing on snacking. These brands enjoy better margins and surging sales.

One example is Sargento Balanced Breaks cheese snacks – a composite snack which include cheese and nuts in a single snack-pot. They achieved $67 million (€60 million) in retail sales in the US in their first year, making it one of the 10 most-successful new products launched in America in 2015

In fact single-serve and snackified products have to be part of every company’s strategy (Key Trend 1). This is one of the strongest ways to get better prices and better margins.

It may seem strange to include non-dairy among dairy trends. But like it or not it’s there, both as a threat and an opportunity. In the US, almond and coconut milks have already taken a 12% share of the liquid milk market.

Non-dairy plant milks successfully use the message of better digestive health as a way of positioning themselves against dairy.

Much of the negativity about dairy that is eroding dairy in some markets – and is going to erode dairy even more – arises from consumers seeking digestive wellness and associating it with dairy-free.

 

Posted in Editorial, Mainsite

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