The Dairy Culture
- Yogurt’s Greek Chorus
- Child-friendly, Healthful Additions in Flavored Milks
- Indulgences…at What Cost?
Consumer regard for yogurt has ebbed and flowed over the past few decades, but yogurt’s healthy attributes and a wider recognition of the benefits of probiotics finally cemented the segment as a sales powerhouse. According to Citigroup Global Markets, total yogurt sales in 2010 amounted to $4.1 billion. Most surprising has been the rapid emergence of Greek-style yogurt, which accounted for nearly a quarter of that sum ($1 billion in annual sales).
Notably, large manufacturers Groupe Danone and General Mills Inc. did not lead the pack among Greek yogurt brands; the pair accounted for market shares of 14% and 5% of sales, respectively. Instead, a pair of smaller manufacturers topped the Greek yogurt sales charts: Chobani (53%) and Fage (17%), the latter averaging sales growth of 50% a year for a decade.
SymphonyIRI data indicate Chobani’s 10% market share puts it atop all yogurt brands. Such a rapid rise could suggest Greek yogurt is something of a fad, but General Mills is investing in the long-term potential of the segment, adding more Greek yogurt capacity, while also introducing Yoplait Greek Parfaits with granola, plus new flavors of Yoplait Greek yogurt in multi-packs.
For its part, Chobani is investing more than a quarter of a billion dollars in the concept (a $134 million expansion this year and $128 million for a new plant in Twin Falls, Idaho). In a conference call with analysts, General Mills chief executive officer Kendall J. Powell expressed confidence in the segment: “I think we’re going to see a very high level of innovation in the yogurt category generally and in Greek yogurt, specifically, over the next 6-12 months.”
Greek yogurt expanded its reach into a younger demographic through Stonyfield Farm Inc.’s launch of YoKids Greek Yogurt. Each 4oz serving of the raspberry- or strawberry-flavored low-fat yogurt contains 100 calories and 1g of total fat, 20% of the recommended daily allowance of calcium and vitamin D, as well as a blend of six live active cultures (S.thermophilus, L.bulgaricus, L.acidophilus, L. bifidus, L.casei and L.rhamnosus), plus 6g of protein. “Greek yogurt is an excellent option for kids at meal-time or snack-time because it’s high in protein and calcium while low in fat. It’s also easy to take on the go and perfect for lunchboxes,” according to pediatrician Bill Sears, MD.
YoFarm Yogurt Co. merged Greek yogurt with the superfruit trend via its launch of YoCrunch Greek Parfait cups. The mix of toasted almonds and superfruits is available in two fruit combinations: Pomegranate Blueberry & Açai, and Raspberry & Açai, each containing 190 calories per 6-oz serving.
Dannon replaced its Dannon Greek brand with Dannon Oikos, buttressing the company’s Stonyfield Organic Oikos Greek yogurt. Both claim to be an excellent source of protein and active yogurt cultures. Dannon research, in fact, discovered Americans are more familiar than ever with probiotics, although its annual survey additionally found “there are still some misunderstandings about what [probiotics] are and how they work, which can lead to confusion for consumers.”
Probiotics also abound in Lifeway USA’s Tart and Tangy Pomegranate Frozen Kefir. Made with natural flavors, it features 10 probiotics and claims to improve immunity and digestion, while weighing in at just 90 calories per serving. It also is 99% lactose-free and contains no gluten.
Embracing the Culture
Some 45% of Americans consider themselves “very” or “somewhat” knowledgeable on the subject of probiotics, compared to 36% in 2009, per Dannon data. However, nearly one quarter of survey respondents (22%) “believed all bacteria can make humans sick,” and one third of respondents felt uncomfortable eating foods containing bacteria. And, 30% of Americans still are unaware different strains of probiotics have different benefits. Nevertheless, according to BCC Research Inc., global sales of probiotic ingredients, supplements and foods accounted for $21.6 billion in sales in 2010 and are expected to top $31.1 billion by 2015. Foods enhanced with probiotics drew the lion’s share of those 2010 sales, with $19.6 billion over the course of the year, and an anticipated $28.1 billion by 2015, with a compound annual growth rate of 7.5%.
Yogurts aren’t the only dairy products boasting the addition of probiotics in 2012, however. Foster Farms Dairy introduced Dairy Balance, a line of liquid milk offerings promising to promote digestive and immune health through the addition of a patented probiotic. In announcing the line, Foster Farms Dairy president Jeff Foster noted the explosive growth of probiotic-enhanced yogurts and contends the Dairy Balance line delivers more active cultures than yogurt, as its unique probiotic had been developed to survive harsh manufacturing processes, such as those experienced during milk processing.
As a result, these cultures, he states, also can withstand harsh stomach acids and allow the deliverability of more beneficial cultures into the system. At the same time, the company claims the milk in whole and 2% varieties possesses all the benefits of regular milk, as well as the same mouthfeel, taste and color. “Our goal was to offer a value-added product for our consumers’ health without changing their normal eating habits,” explains Rick Werhel, vice president of sales marketing for Foster Farms Dairy. “Since almost every household in America purchases milk and most people drink it every day, what better way to provide people with their daily dose of probiotics?”
Some milk products have lost a bit of their nutrition luster in the public eye, however. Owing to concerns about childhood obesity, some schools opted to remove chocolate (and other flavored milk) from their cafeterias. This led to controversy, especially when a study, by the Prime Consulting Group (funded in part by the dairy industry-oriented group Milk Processor Education System) purported that the consequences of the ban might have led to a lower level of nutrition among students. The study found that when only white milk was offered, consumption of all milk dropped by an average of 35% and by more than 50% in some cases. Anti-milk groups responded with research of their own questioning the health value and claims of milk, and the conflict will likely remain polar.
At the end of the day, moms put their collective foot down: According to KRC Research interviews, 80% of mothers of school-aged kids polled did not support the removal of chocolate milk from lunch lines and school cafeterias. More than three quarters of the moms agreed that: chocolate milk is a beverage their child liked to drink; kids needed healthy choices at school, including chocolate milk; and children should be able to choose which beverage to drink at school. Regardless, the debate presented opportunities for dairy manufacturers to enhance the healthy attributes of their flavored milks.
Prairie Farms Dairy launched a range of new flavored milk products for schools, reformulating its chocolate milk, into a low-fat, lower-sugar (11g), 130-calorie-per-8-oz serving, compared with its previous 1% chocolate milk, which had 170 calories per serving and 16g of added sugar. The company added other formulations—such as strawberry, Cookies’N Cream and vanilla—all with no high-fructose corn syrup (HFCS), no artificial sweeteners, less added sugar, fewer calories and 0% fat. As Rebecca Leinenbach, sales program director with Prairie Farms Dairy, explained, “The new formulations were a direct result of ongoing conversations with school foodservice professionals about the stricter standards for school meals that take effect in the 2012/2013 school year.” The new fat-free chocolate milk also arrived a year ahead of new USDA regulations, and the entire range meets the Healthier U.S. School Challenge Guidelines and the Alliance for a Healthier Generation Beverage guidelines.
Dean Foods Inc. also added what it terms a “better-for-you” chocolate milk. Made with fresh white milk, TruMoo claims to have only 40 more calories per serving than plain white milk, is made without HFCS and has 15-20% less sugar than other Dean Foods’ chocolate milk offerings. Fat-free, TruMoo milk served in schools contains 130 calories per serving and 10g of added sugar, compared with previous Dean chocolate milks made with HFCS and up to 180 calories and 16g of added sugar. TruMoo’s retail version is low in fat (1%) and has 150 calories per serving; its added sugar content is the same 10g. (It should be noted that the TruMoo product in California differs slightly in nutrition composition, a result of different regulatory requirements in that state. There, the total sugars are greater, due to the addition of non-fat milk solids to boost protein and calcium beyond Federal standards.)
Andrea Carrothers, MS, RD, nutrition communications manager for Dean Foods, explained the thinking behind TruMoo: “Dean Foods recognized that if we could strike the right balance of ingredients, flavored milk wouldn’t need as much sweetener. We began creating and [taste-]testing new formulas in 2008...and found TruMoo milk to be a clear winner, even beating out some of the strongest brands in our own portfolio. We also had a clear objective to remove HFCS, an increasing request from our customers and consumers.” TruMoo also had the benefit of a degree of brand awareness even before it hit store shelves officially. Wendy’s International Inc. restaurant chain began offering the beverage as part of its menus last May.
Consumers across the country looking for organic milk faced some distinct challenges over the course of the year. Rising costs for organic grain and hay led to shortages of organic milk in some areas and rising prices in others. Target Brands Inc. expressed difficulties keeping organic milk on shelves nationwide, while Publix Super Market Inc. announced shortages beginning last November of its Publix GreenWise Market organic store-brand milk, as well as in such national brands as Dean Foods Inc.’s Horizon and Organic Valley Farms. With the shortages came a rise in prices, leading a number of consumers to seek alternatives, sometimes from outside the dairy segment. Flaxmilk, which manufacturer Flax USA describes as the “first and only all-natural, dairy-free milk product made from cold-pressed flax oil,” is rich in omega-3 fatty acids. Each 8-oz serving has 50 calories and promises as much calcium as cow’s milk, plus vitamins A, D and B12, but with 0g cholesterol and no trans fat. The completely plant-based product is free of gluten and lactose.
Similarly, Pacific Foods of Oregon Inc.’s Pacific Natural Foods complemented its line of non-dairy milk alternatives with 7 Grain Blend, mixing barley, brown rice, millet, oats, spelt, triticale and wheat. Naturally sweetened from the grains, the beverage is high in calcium, B vitamins and also includes 500mg of omega 3 from ALA (alpha-Linolenic acid) from flax oil.
Dairy beverages have seen a steady decline in consumption in recent decades, with per-capita consumption of cow’s milk dropping from 24.3 gallons per person per year in 1994 to 20.8 in 2008, according to USDA data. PepsiCo says the dairy category is a “key component” in its global growth strategy. Speaking at the International Dairy Foods Association’s 27th Annual Dairy Forum in January, Sam Lteif, the company’s general manager of global nutrition, believed dairy-based products have “tremendous potential” and could post growth more than double that of bakery and chilled processed foods combined.
Milk companies were far from the only dairy entities facing harsh price conditions in 2011. Ice cream manufacturers attempted to absorb some of the higher commodity costs, notably the 38% jump in milk prices, 20% rise in sugar costs and 22% increase in HFCS, just in the past year alone, according to the USDA. The Bureau of Labor Statistics noted ice cream prices rose a comparatively tiny 7% over that time. However, in a report analyzing retail ice cream brands, Mintel found the ice cream segment suffered an 8% decline in sales from 2006-2011, noting, “Full-fat, indulgent brands have performed well in the past year, appealing to consumers’ desire for a rich, creamy, flavorful and fun eating experience, gaining share but not growing fast enough to reverse the segment’s steady decline.”
The researcher found Ben & Jerry’s Homemade Inc. remains among the segment’s best-performing brands, with sales growing nearly 7% from 2010-2011, excluding Wal-Mart, on the strength of such introductions as Bonnaroo Buzz (a blend of coffee and malt ice creams with toffee chunks and a “whiskey caramel swirl”) and the Saturday Night Live skit-inspired Schweddy Balls (blending Fair Trade vanilla ice cream with a hint of rum, fudge-covered rum-flavored spheres and milk chocolate-malt orbs).
Sales of frozen novelties managed 15% growth from 2006-2011, to hold 41% of the ice cream/novelty/frozen-yogurt segment, Mintel found. (Ice cream weighed in at about 54%.) This could be a result of the “permissible indulgence” these products provide: Economically strapped consumers are willing to indulge themselves with small, less-expensive treats. This could explain the success of Unilever’s USA Magnum ice cream bars and perhaps Nestlé’s Skinny Cow brand, an effort to merge indulgence with a weight-conscious positioning. With the U.S. economy continuing to falter, such indulgent, cost- and weight-conscious approaches could prove invaluable to new product successes.