Ask any dairy industry professional about the most important trend in milk and you’re likely to hear the same answer:
In 2006, sales of fluid milk enjoyed their widest gain in 20 years. At 54,150 million lbs, sales rose 1.2%.
More complicated than identifying this trend is understanding the diverse collection of factors that precipitated the improved sales. Health and wellness issues have bolstered the dairy market, particularly the recommendations of increased consumption included in the Dietary Guidelines for Americans 2005. Still, asked what single factor best explains the upturn in consumption, one industry professional said nothing has been more important than various steps that have made drinking milk increasingly convenient.
"The on-the-go pack addresses the increasingly mobile lifestyle of today’s consumer," said Gail Barnes, vice-president of business development — fluid innovation, Dairy Management Inc., Chicago. "Single-serve packaging allows consumers to have anything, anywhere and at any time. We think this is one of the keys."
Elaborating on the on-the-go concept, Ms. Barnes said packaging must be easy to carry, easy to open and easy to drink without any risk of leaks. Today’s portable packaging is considerably more sophisticated than the cardboard milk single-serve containers that were a school lunchroom fixture in earlier times.
"It has to fit into a cup-holder, because we are a mobile, vehicle-based society," Ms. Barnes said. "On some higher end cars there are cup-holders now which help keep beverages warm or cool.
"Generally, you need to have some kind of a screw cap and, if you’re going to carry it around, it needs to be lightweight. If it can break or cut, that would be a problem. It has to be safe."
A range of materials have been used effectively for on-the-go packaging, including aseptic containers, plastic bottles and aluminum cans, Ms. Barnes said.
Ms. Barnes described the 1.2% rise in milk consumption as more than a blip, suggesting the improvement could not be pinned on only a single demographic segment.
"If you have an upturn of 1.2%, that’s probably not just kids," she said. "The aging baby boomer and the Millennials account for a large part of the population. If you are going to get an increase like that, an understanding of demographics says it is probably coming across the board."
This notion that baby boomers have contributed to the improved demand is reinforced by a second driving force in the dairy market and throughout food processing — health and wellness.
"Clearly, health and wellness supports increasing milk sales and consumption," Ms. Barnes said. "We are an aging population, and many sales are to the aging baby boomer. This generation wants the human equivalent of extended shelf life, not necessarily to live forever but to live better and longer."
Within the beverage segment, products tagged as health and wellness-oriented are the fastest growing segment, Ms. Barnes said, citing data indicating 4.8% annual sales growth projected through 2009.
"In the case of milk, value-added milk is perfect, or as we call it, ‘milk plus,’ " she said. "What do I mean by ‘plus’? Milk already is nutrient dense, providing nine essential nutrients. Milk-plus may mean added protein and calcium. Or it may mean added omega-3 or fiber."
Still another milk-plus health and wellness arena, one that has gained increasing interest, is probiotics, microorganisms that furnish health benefits, Ms. Barnes said.
She cited data projecting the market for drinkable yogurt and yogurt to grow to $15 billion by 2010 from $9.7 billion in 2005 and said an important element of this growth is probiotics.
"One of the things driving this category is Activia, one of the most successful dairy product launches ever," Ms. Barnes said.
A product of Groupe Danone, the probiotics in Activia promote digestive regularity.
"The product had been very successful outside the United States, but the conventional wisdom was that U.S. consumers don’t like to talk about regularity," Ms. Barnes said. "The conventional wisdom was wrong. With 75% of the population experiencing some kinds of problems with regularity, there is a large target market for this kind of product and Activia sales show it."
While dairy products have been the principal sector in which probiotics have entered into the U.S. marketplace, she said there is reason to expect the industry will retain its grip on this area.
"We are funding research that looks at the components in milk that enhance the ability of probiotics to survive and deliver their benefits," she said. "There already is some research indicating dairy is the perfect medium for probiotics."
Looking forward, Ms. Barnes said there is reason to expect further improvement in consumption trends. Among technological developments, extended shelf life could be a key toward this objective.
"The big news is that in processing and packaging there is technology that allows milk to be shipped at ambient temperatures and then sold chilled," Ms. Barnes said.
This technology requires that a sterile environment be maintained throughout the packaging process. The product is heated to a higher temperature but shorter time than normal pasteurization.
Shelf life for ultra-heated product is three months and longer, versus 14 days for normal pasteurization.
In extending the shelf life, it will be possible to sell dairy products in more channels with increased distribution in vending machines and convenience stores, Ms. Barnes said. "It provides tremendous flexibility," she said. "It is a key to getting milk in more places."