Health, quality, and on-the-go snackability. This is what consumers are looking for in food choices across industry sectors, and it's certainly what they want in dairy.
Here is a look at current trends from Dairy Foods' most recent State of the Industry Report.
Healthy doesn't necessarily mean low- or no-fat
Recent studies have shown that people who consume full-fat dairy are less likely to be obese and have health problems (examples here and here). Accordingly, consumers are shifting away from skim and low-fat products in favor of their full-fat counterparts.
- As of mid-2015, unit sales of whole milk were up 3%, while unit sales of skim milk were down 5%.
- Sales of butter and whole-milk yogurt are also going up.
- The one area where high-fat products aren't holding steady is ice cream, which has hit new lows in the past few years.
High quality + innovative products = more sales
- Unit sales of natural cheese were up nearly 3% by mid-2015, while unit sales of processed cheese decreased 5%. Specialty cheese is one of the top 10 fastest-growing products in the deli case.
- European-style super-premium butter is becoming more popular. It still has only 1% of market volume, but that percentage is growing quickly.
- Premium yogurt is gaining steam, as evidenced by the rise of specialized and grass-fed products.
- Flavor and variety are also on consumers' wish lists, with bold, unique flavors leading the charge.
Snacking, convenience is still going strong
A recent survey by Technomic found that snacking is so prevalent that it's starting to replace regular meals. The snacking trend is alive and well in the dairy category as well. And, as in other sectors, snacking and convenience go hand in hand.
- Food processors are creating more snack packs that include cheese as well as items such as nuts, pretzels, and fruit.
- Drinkable yogurt products are outpacing spoonable products in growth (though both are expected to grow through 2020).
- On-the-go packaging continues to be a hit across all dairy categories.
Implications for Food Processors
Food processors in the dairy sector are reacting to consumer preferences and trends in several ways. Convenient, snack-ready options play to consumers' demand for healthy products they can eat on-the-go. And innovative flavors add variety and choice.
According to Heather Porter-Engwall of the Wisconsin Milk Marketing Board, we can expect these trends to continue:
“Shoppers continue to seek out great taste. Second to a favorable flavor experience, shoppers seek out value. Value can mean different things to different people, but value is typically achieved via one or more of these three attributes: health and wellness, convenience, and cost/affordability.”
Porter-Engwall also expects dairy products to continue offering a higher level of transparency. “Clean labels and clear packaging continue to trend upward,” she notes, “along with the storytelling of who made it, how he or she made it, and why it's good for you.”
Premium and full-fat products are another area of growth. Dairy expert Natasha Case notes, “Consumers are looking to introduce more healthy fats into their diets. … This full-fat trend will carry over for other dairy products.”
Overall, the dairy sector is well positioned to respond to current trends in consumer preferences. As IDDBA food scientist Donna Berry says:
“I believe that the dairy industry is sitting in a very nice place right now. Everything dairy is about sits very nicely with today's consumer. It's local, it's fresh, and it's minimally-processed, for the most part. It's very appealing to today's clean-label shopping consumer, in all age groups.”