Q: What’s the best place for processors to start?

A: The insights from the DMI Value-Added Milk study covered in this supplement will help processors and manufacturers focus their product development efforts in areas that will build their businesses. The study was designed to help industry better understand consumers’ beverage needs and preferences based on their changing lifestyles and nutritional requirements. DMI already is working with industry partners committed to introducing new milk and milk-based products based on the research.

Q: Are there specifi c resources to help with product innovation?

A: The DMI National Dairy Foods Research Center Program supports the most current research and innovations in dairy products, ingredients, processes and packaging. This research results in technologies that can make new products possible— and successful. Six program sites serve processors across the country with technical expertise, training and dairy pilot plant facilities. Three applications labs assist DMI partners with prototype/concept development; product and process troubleshooting; production scale-up assistance and sensory evaluation. Our Web site, www.innovatewithdairy.com, is a rich resource on dairy innovation, including research, prototype formulations and more.

Q: What about product positioning?

A: Positioning the right product to the right consumer at the right place and time is the key to growth for the milk category. The milk market is ready for segmentation, and we believe the potential for incremental growth is significant— that is, if milk and milk-based beverages are developed to meet the changing nutritional and lifestyle needs of today’s consumers.

It is essential to use a disciplined product development process based on solid nutrition and market research. In addition, the concept development and testing process, in advance of new product introductions, can help focus new product targets, messaging and claims. These steps can reduce manufacturers’ risk and increase their success rate for bringing new dairy products into the market.

Q: What’s DMI’s ultimate goal?

A: Value-added milk has been growing at about 6% a year and currently represents $4.4 billion in sales annually. In five years, the category is expected to increase by one billion pounds and $1.5 billion. We’re trying to drive that figure as high as possible. Bottom line: We want to recapture the share of stomach lost to alternative beverages such as soft drinks, waters and juices to drive sales and consumption of dairy. The only way we’re going to do that is by giving processors and manufacturers the tools to introduce products that consumers truly want.