10 Key Trends in the Business of Dairy Nutrition By Joana Maricato & Julian Mellentin

Published November 2016

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ABOUT THIS REPORT The only trends that matter are the ones that give you opportunities to secure lasting growth for your business. This report sets out the 10 most important growth opportunities in the business of dairy nutrition, highlighting some key white spaces for better margins and additional volume. Using 20 detailed case studies from Europe, the US, South America, Australia, New Zealand and Asia, the report shows how companies are launching new products and reinventing old brands to successfully connect to the trends. As science increasingly shows that there are no negatives to dairy fat – and maybe many positives – dairy is at the dawn of a re-birth as a naturally healthy whole-food. This report is a strategy tool for anyone in dairy brands or dairy ingredients who wants to take advantage of these positive shifts in science and the wealth of new product opportunities.

10 Key Trends in the Business of Dairy Nutrition UP with FAT DOWN with SUGAR

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Munk  Packs  contain  90  to  100  calories  and  3  to  4   grams  of  fibre  per  120g  serving,  and  sell  at  a   suggested  retail  price  of  $2.49  (€2.23).    

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Value is when the benefit and the brand justify the price – in the mind of the consumer

© New Nutrition Business



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1 litre of “normal milk” retails at around S$2.20

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aks combines bites of natural cheese, nuts and sweet dried fruit. Each 7 grams of protein and between 170-190 calories. They are sold in dividual-sized packages (42.5g).

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To  go  in  2.  MAKING  DAIRY  UNASHAMEDLY  INDULGENT  

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women aged 40-60, from higherincome households.

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"Today's health-conscious consumers are looking for portable snacks that balance nutrition and great taste," said Chris McCarthy, Director of Marketing for the Sargento Foods Consumer Products Division.

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DIGITAL REVOLUTION

HELLO SAVORY

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CONTENTS 1. How do we identify the Key Trends? 2. Summary 3. The 10 Key Trends Key Trend 1 Snackification Key Trend 2 Fat/sugar Key Trend 3 Cheese Key Trend 4 Protein Key Trend 5 Digestive Wellness Key Trend 6 Dairy-free Key Trend 7 Permission to Indulge Key Trend 8 Premiumisation Key Trend 9 Digital Revolution Key Trend 10 Hello Savory Case Study 1: Moon Cheese - a snacking strategy to create a new category for long shelf-life cheese Case Study 2: Lala drinking yoghurt aims to expand Americans’ healthy snacking repertoire Case Study 3: Noosa shows how successful full-fat yoghurt can be Case Study 4: Annie’s converts parents to the benefits of full-fat yoghurt Case Study 5: Sargento Balanced Breaks - Cheese reinvented as a naturally healthy whole food snack Case Study 6: Good Culture leverages the protein benefits of cottage cheese Case study 7: L-Men - connecting to protein can be a successful strategy for niches in Asia Case Study 8: Premium pricing no barrier to success for P3 Portable Protein Pack Case Study 9: A2 Milk - a digestive wellness business Case Study 10: Ades soy milk and juice in Brazil Case study 11: Coconut Collaborative takes the non-dairy challenge to yoghurt to the next level Case Study 12: Ben & Jerry’s enters the non-dairy ice-cream market Case Study 13: The Collective: permissible indulgence + good marketing Case Study 14: Yasso frozen Greek yogurt desserts “a little bit of indulgence” Case Study 15: Souvenaid, a medicalised dairy drink profiting from an e-commerce focus Case Study 16: A Spanish dairy combines sport milk with mobile app Case Study 17: Vigor introduces Brazil to savory Greek yogurt Case Study 18: Chobani - a mass-market brand introduces savory yoghurts Case Study 19: Chaat – a start-up in savory yoghurt snacks with global flavours Case Study 20: Sohha savory yogurts bring Mediterranean flavours to dairy snacking

CHARTS & TABLES Chart 1: We test the trends on 8 key parameters Chart 2: Where the dairy trends sit on the product lifecycle Chart 3: Successful brands connect to several key trends Chart 4: Snacking transforms commodities into a value-added, high-margin business Chart 5: Dairy pioneered single-serve convenience 25 years ago Chart 6: Cheese is the next big snacking opportunity Chart 7: Lala competitively priced to drive growth Chart 8: Fat and sugar content of yoghurt brands, UK Chart 9: Sugar vs fat content (g/100g) in yogurt, US Chart 10: Fat and sugar content of yoghurt brands, the Netherlands Chart 11: Noosa’s super-premium pricing no barrier to success Chart 12: Annie’s price comparison Chart 13: There is growth potential for cheese in many countries Chart 14: Cheese to catch up with yoghurt Chart 15: Premium pricing strategy has not hindered growth Chart 16: Good Culture is premium-priced Chart 17: Oscar Mayer P3 price comparison Chart 18: The upward march of A2 Milk Chart 19: Dairy alternative market size and growth rate Chart 20: Where is non-dairy most popular? Chart 21: Dairy giant Danone commits to growing the non-dairy market Chart 22: Dairy giant Danone commits to growing the embryonic non-dairy yoghurt and desserts markets Chart 23: Coconut Collaborative is premium priced Chart 25: Ben & Jerry’s non dairy ice cream price comparison Chart 26: Super-premium pricing is no barrier to success Chart 27: Premium-priced niches growing as low-cost “volume market” falls Chart 28: “Niches” set to become 30% of the market by 2020 Chart 29: Digital Revolution drivers Chart 30: Chobani savoury yogurts are premium priced Chart 31: Chaat savory yogurts are premium-priced Table 1: Nutrition snapshot, Cheddar Moon Cheese Table 2: Nutrition snapshot, Pepper Jack Moon Cheese Table 3: Nutrition snapshot, Lala yogurt smoothie – vanilla Table 4: Nutrition snapshot, Lala yogurt smoothie – wild strawberry Table 5: Nutrition snapshot, Noosa full-fat yogurt – Coconut Table 6: Nutrition snapshot, noosa full-fat yogurt – Passion fruit Table 7: Nutrition snapshot, Annie’s whole milk yogurts – Vanilla Table 8: Nutrition snapshot, Annie’s whole milk yogurts – Berry patch Table 9: Nutrition snapshot, Balanced Breaks Table 10: Nutrition snapshot, Good Culture Table 11: Nutrition snapshot, P3 Nut Clusters Table 12: Common claims used in plant-based milks Table 13: Nutrition snapshot, Ades soy milk + fruit juice Table 14: Nutrition snapshot, Ades soy milk + fruit juice, no added sugar Table 15: Nutrition snapshot, Ades soy milk + fruit juice, kids Table 16: Nutrition snapshot, Coconut Collaborative yoghurt Table 17: Nutrition snapshot, Ben & Jerry’s non dairy Chunky Monkey Table 18: Nutrition snapshot, Ben & Jerry’s non dairy Fudge Brownie Table 19: Nutrition snapshot, Collective Dairy Russian Fudge Table 20: Nutrition snapshot, Collective Dairy kids’ Sassy Strawberry Suckies Table 21: Nutrition snapshot, Yasso blueberry frozen Greek yoghurt Table 22: Nutrition snapshot, Yasso chocolate fudge frozen Greek yoghurt Table 23: Nutrition snapshot, Yasso sea salt caramel frozen Greek yoghurt Table 24: Nutrition snapshot, Sport Life Recovery Table 25: Nutrition snapshot, Vigor savory Greek yogurt – Black Olives Table 26: Nutrition snapshot, Chobani Flip Sriracha Mango Table 27: Nutrition snapshot, Chobani Flip Chipotle Pineapple Table 28: Nutrition snapshot, Chaat Cucumber Mint Table 29: Nutrition snapshot, Chaat Mango Chili

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ABout us ABout us

This report draws on material published in our journal New Nutrition Business, which provides case studies and analysis of success and failure in the global nutrition business. It is used by more than 1,700 corporate This report draws on material published in our journal New Nutrition Business, which provides case studies subscribers in 42 countries. and analysis of success and failure in the global nutrition business. It is used by more than 1,700 corporate subscribers in 42 countries. Since 1995 we have been researching, analysing and forecasting the global nutrition business, and we provide expert consultancy to companies and government organisations around the world. Since 1995 we have been researching, analysing and forecasting the global nutrition business, and we provide expert consultancy to companies and government organisations around the world. Many companies make New Nutrition Business available online to all of their research, product development and marketing staff. Our website – www.new-nutrition.com – contains the largest searchable internet database of Many companies make New Nutrition Business available online to all of their research, product development information about the business of food and health. and marketing staff. Our website – www.new-nutrition.com – contains the largest searchable internet database of information about the business of food and health. We have a small staff – all with experience in nutrition or in food and beverage marketing – but a global perspective, with offices in London and New Zealand and affiliates in Japan and Finland. We have a small staff – all with experience in nutrition or in food and beverage marketing – but a global perspective, with offices in London and New Zealand and affiliates in Japan and Finland.

ABOUT THE AUTHORS Julian Mellentin is one of the world’s few international specialists in the business of food, nutrition and health. Julian is the owner and editor of New Nutrition Business, the leading source of industry and market analysis, which has focused solely on researching and forecasting the nutrition business since 1995. Joana Maricato is a market analyst at New Nutrition Business, where she focuses on identifying the best strategies for commercializing nutrition science and helping clients create new products with health benefits. A graduate in biological sciences, Joana also studied marketing and business strategy during her Master’s in Health Food Innovation Management in Maastricht University and her studies in the London School of Economics and Political Sciences.

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