Fat’s impact on fluid milk

The whole-fat trend is playing out in fluid milk, too. Overall, total fluid milk sales performance has improved from previous years. All-channel volume continues to be down slightly from Jan. 1 to Aug. 7. However, there are pockets of positive momentum at both retail and quick-serve restaurants, with whole-fat driving this energy.

The report from I.R.I. shows whole-fat milk volume sales were up 5% during this time period, and represents 34% of fluid milk volume sales. Reduced-fat, with 37% share, was down 3%, and low-fat, with 18% share, was down 5%. The biggest loser is fat-free milk, with volume sales down 13% and having only 10% share.

Not considering fat content, lactose-free milk is a bright spot, delivering an impressive sales lift of 17.5% during this time period, on top of the 19% growth experienced in 2015. Though accounting for only 3% of volume share, the lactose-free attribute is driving fluid milk growth. In fact, 16 million households currently buy it, with growth coming from the launch of fairlife as well as from the established leader Lactaid and other branded and private label players.

Another opportunity exists in flavored milk, where unit sales were up 7% from Jan. 1 to Aug. 7, representing a 5% volume share. Many of the new flavored milk innovations are whole fat and are positioned as indulgent beverages. Others contain added protein and are positioned as either a refueling beverage or a meal replacement.

An unexpected flavor really stood out this year. That was coffee, to be specific, cold-brew coffee. Iced or chilled coffee has very much come into its own in food service and as a ready-to-drink (R.-T.-D) product, said David Sprinkle, research director, Packaged Facts, Rockville, Md. Among coffee drinkers, according to the market research firm’s survey data, 10% drink iced coffee most often. Conversely, only half of coffee drinkers exclusively take their coffee hot.

Cold-brew iced coffee is driving innovation in the R.-T.-D. sector. Among U.S. coffee drinkers, 5% choose this slower, smoother and less bitter brew most often.

On the cheese side of the dairy case, American’s passion for cheese carries on. The domestic cheese market is strong with the U.S. Department of Agriculture reporting a volume increase of 5% for the first six months of 2016 compared to 2015.

Retail cheese has contributed to the growth with volume sales up 2% through Aug. 7, driven by natural cheese, according to I.R.I. A driver of retail growth is in snacking formats, with portion packs, often in bold, fiery flavors targeted to adults.

For example, Sargento Foods Inc., Plymouth, Wis., added new varieties to its multi-serve bags of snacking cheese. Sargento Snack Bites come in 6-oz bags containing about 42 sticks. The line debuted early in the year in four varieties: chipotle BBQ cheddar, colby-pepper jack, savory garlic and herb jack and Wisconsin sharp cheddar. Mid-year, the company added sweet pepper jack, which was a limited-time offering at Costco.

With ice cream, less is more. New research from Mintel shows that while 9 in 10 (92%) consumers purchased frozen treats from Dec. 1, 2015, thru April 2016, nearly one fourth (22%) are buying less. What’s more, while just 11% of consumers considered portion control as a purchase factor in 2013, today, one third (32%) report that they purchase single-serving frozen treat packages.

“While little opportunity exists to acquire new customers in the universally penetrated frozen treat market, interest in premium and healthy options gives brands the opportunity to offer products that communicate health and wholeness, while also encouraging moderation, which can aid in increasing trials through smaller sizes,” Ms. Bloom said. “Putting a heavy focus on quality, taste and health will resonate with consumers, and emphasizing single-serving packs and messaging around the variety of products should appeal to Americans’ preference for snacking.”