2015 has seen strong trends emerge in the dairy industry, and they are continuing to develop, especially in the largest industries of milk, cheese, yogurt, ice cream and frozen novelties. This year and continuing, dairy producers will need to focus on flavor, health and convenience to boost sales both in the dairy case and in the freezer. In some cases, producers may need to change production methods and upgrade dairy equipment in response to these trends.
Yogurt and yogurt drinks have enjoyed strong dollar sales growth with a 46 percent gain between 2009 and 2014 to reach $8 billion in estimated sales, according to Mintel. Greek-style products fueled this growth, and they will continue to dominate, although the pace of growth may slow as the new product novelty fades. Yogurts in general will remain popular as consumers remain interested in health and indulgence. Brands will try to differentiate in 2015 to spark interest in various health benefits and product innovations to meet demand for yogurt products that are convenient, responsible and snackable.
Versatility, relative affordability, and a variety of flavors and formats have created high household penetration and robust sales for cheese. While consumers are concerned about the nutritional value of processed cheese, interest in cheese is strong. Sales jumped 14 percent from 2009 to 2014, reaching $21.4 billion in 2014. Interest in snacking, healthy eating, and gourmet and natural cheeses will spur growth in 2015. Natural cheese, which already represents 73 percent of this sales category, will continue to flourish as consumers take more interest in locally produced, organic products.
Nielsen Global Survey of Snacking polled more than 30,000 online consumers in 60 countries and found that 46 percent of respondents said they ate cheese within the previous 10 days; 5 percent said cheese was their favorite snack food. According to data provided by Nielsen to The Huffington Post, Americans now spend more on snacks than on meals. Many consider cheese a great snack because of the wide variety flavors and convenient packaging.
Dean Foods currently owns 36 percent of the market share in the milk category, primarily because of the company’s success in the nondairy segment. Private labels are making up ground, though, especially in organic milk, milk alternatives and products featuring unique flavors.
Consumers are increasingly interested in health and have a growing desire for nutritious beverages that taste good. The milk, creamer and nondairy category declined 12.5 percent in 2009 during the economic recession, but the nondairy segment helped increase sales in this category through 2013. Milk product makers must put a spin on their milk and nondairy offerings to continue capturing consumer interest.
Ice Cream and Frozen Novelties
Despite high household penetration, people are eating fewer desserts, including ice cream and frozen novelties. To fend off declining sales in 2015, frozen treat makers will need to create new flavors and present the health attributes of their products.
Gelato has sustained the ice cream segment in recent years and will likely to continue to support the ice cream and frozen novelties category. Product quality and flavor innovation makes gelato appealing to consumer interest; its higher price point makes gelato attractive to producers and retailers. Because it is lower in butterfat, higher in density and contains many natural ingredients, gelato may offer the much-needed balance between consumers’ desires for health and indulgence.
Depending on their individual market categories, dairy food producers can expect strong trends to emerge in the industry during 2015. Many of these trends will be driven by consumer desire for dairy foods that are delicious, convenient, and nutritious.