New flavors, concepts driving dairy product segment

by Keith Nunes
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SAN JOSE, CALIF. — The dairy products market is experiencing sturdy growth driven by an onrush of new products intended to meet the demands of both health-conscious consumers and indulgence-seekers, according to "Dairy products: A global outlook," a report by Global Industry Analysts. Future market expansion is based on unique flavor and ingredient combinations, novel packaging and pack formats, and aggressive marketing. The report’s authors said the Asia-Pacific region is expected to offer the best prospects for expansion of dairy markets due to good economic growth and greater purchasing power of consumers.

Manufacturers are expected to continue to deliver wider product assortments including value-added, functional, convenient, ready-to-eat dairy products targeted to dieters to match the busy lifestyles of consumers. Health and wellness awareness is expected to provide growth opportunities for participants touting "lite," low-fat, no-fat or sugar-free claims of their products. The dairy products market also is benefiting due to the spread of established retailers and creative distribution streams such as shopping centers, service stations, vending machines and other locations. The Internet also has become a significant source for marketing dairy products, apart from home delivery of packaged and durable products.

The healthy image of drinking milk is driving the world market for milk comprising natural and organic varieties as well as milk fortified with healthful ingredients. Milk served in smaller and reusable bottles, and tastier flavors will boost the plain fluid milk market, according to the report.

The largest number of new dairy product introductions since 2006 has been in the ice cream segment. Ice creams are particularly popular among children and young adults and have become more commonly purchased for at-home

consumption as part of regular grocery shopping trips. Researchers at Global Industry Analysts predict growth in the ice cream market will continue to be fueled by new flavor introductions, increased emphasis on premium products, development of niche segments such as low-fat ice cream, advancement in production and processing technologies such as low-temperature freezing/blending technology, and marketing muscle of participants. Though summer remains the peak time for ice cream sales, consumption patterns are changing as manufacturers promote their products as a year-round treat.

Dairy products such as yogurts are flourishing partly based on their freshness and nutrition appeal to consumers seeking healthy foods. During recent years, manufacturers had launched yogurt products with added nutrients to increase product popularity, particularly among health conscious consumers.

Yogurts featuring probiotics are most popular among consumers.

This article can also be found in the digital edition of Dairy Business News, September 2008, starting on page 1. Click
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