A leading force within global packaged food, dairy maintained its position atop the industry in 2018. Though notable regional differences persist, dairy remains broadly popular, recording over USD500 billion in sales last year, according to Euromonitor International. However, macro trends affecting the global food industry are fomenting significant disruption. Shifting consumer behaviors and values are inspiring innovative and competitive new products. The very conception of dairy is, in many ways, being fundamentally altered, with potential ramifications ahead for the industry. In this environment, 2019 will likely be a year of continued transformation, highlighted by several key formative trends.
High-protein products are on the rise as consumers look to reduce their intake of sugar and improve satiety. Amidst this, dairy products occupy a position of strength since many are naturally laden with protein. Even so, manufacturers have sought to emphasize high-protein content on packaging, while products like ultra-filtered milk, which offers significantly higher protein content, have witnessed expansion in an effort to further appeal to this demand.
As urbanization expands and consumers live busier lifestyles, dairy is attempting to adapt with high-protein portable products offering greater convenience. While many cheese snacks and drinking yogurts are geared toward busy, young, single consumers, an increasing number are also being constructed for children. Younger parents, especially millennials, are willing to pay more for high-quality, premium dairy products, and manufacturers are capitalizing on this opportunity to boost revenues.
Dairy has been profoundly impacted by the rise of plant-based alternatives. Traditionally soy-based but increasingly derived from nuts, these alternatives continue to steal share and upend the industry as concerns grow, particularly among younger consumers, over animal welfare and environmental footprints. As demand grows for these products, new formats continuously emerge, expanding well beyond just beverages and including those derived from oats and macadamia as well as alternatives featuring probiotics.
Perhaps most interesting is the continued evolution toward alternative animal milk products. Allergies and lactose intolerances have stoked powerful demand for dairy products more easily digested than those traditionally derived from cows. Manufacturers have noticed, with many leaping at the opportunity to fulfill demand. From milk to yogurt, lactose-free cow products have proliferated and thrived in recent years. A2 milk, a variety of cow’s milk containing only A2 beta-casein protein and thus believed to be easier to digest, has experienced exponential growth in markets where it has been introduced like Australia and New Zealand. Additionally, dairy products gleaned from animals other than cows have experienced surges in popularity given their tendency to offer easier digestion. Milk, yogurt and cheese from goats and sheep have thus far led the way, but more niche varieties, such as camel milk, have also garnered demand, especially within developed markets with little previous exposure.
The extent to which options like ultra-filtered milk, probiotic plant-based products and camel milk will expand and become sustainable long-term fixtures is far from clear; yet, the global dairy industry is undeniably being altered by changing consumer lifestyles and priorities. As these trends continue and the industry adapts, the future of dairy may look increasingly distinct from the familiar past.Join Euromonitor International’s presentation, “Dairy in 2019: Impactful Trends in a Transforming Industry”, at IDDBA 19 on Sunday, June 2 at 12:45 p.m. Pre-register to receive a copy of the presentation following the session