The Future Of Dairy

Processors need to reposition fluid milk in order to meet emerging consumer needs

Creating new segments will help protect milk’s relevance, while developing products for those segments will help revitalize sales.

By Madlyn Daley

An excellent source of nine essential nutrients, milk is a healthy part of a diet at every age. But in order to meet the multidimensional needs of the American consumer, the time has come to reposition this dairy product. Key statistics to note include:

  • Milk sales have been flat for the last 30 years, according to the U.S. Department of Agriculture, while coconut milk and almond milk dollar sales are up 400 and 100 percent, respectively, since 2010 (although these are still relatively small segments), SymphonyIRI Group reports.
  • Milk takes significant share at meals, but falls behind for between-meal occasions, Kantar Worldpanel reports (and nearly one-third of the population is opting for snacking over the three-meal-a-day structure, so the number of traditional meals consumers eat could decline).
  • Milk under-indexes on all the major consumer beverage needs, including thirst, energy and relaxation, according to Kantar Worldpanel.

Creating new segments will help protect milk’s relevance, while developing products for those segments will help revitalize sales. Think about how a completely breakthrough product such as the Swiffer® Sweeper can revolutionize a category — a new product of this magnitude can help capture sales and bring consumers back to fluid milk.

Consumers want energy

The energy segment is a key opportunity here. In 2008, the energy drinks were a $4.8 billion market, and Datamonitor projects that energy drinks will grow to $19 billion by 2013 (an increase of 160 percent). Furthermore, 63 percent of Americans are concerned about a lack of energy, according to GfK Roper Reports. As a proven recovery drink, chocolate milk is in a prime position to capture more of the energy market.

And ways to relax

Relaxation presents another strong growth area for fluid milk products, with predictions that both Pepsi and Coca-Cola will show big growth in this area, to the tune of 300 percent between 2008 and 2014, according to Small Cap Network. Growth of this magnitude makes sense because just under half of consumers agree they live a stressful life and are looking for ways to simplify, according to the National Marketing Institute’s Health & Wellness Trends, and GfK Roper Reports state that one-third of parents report they feel extreme stress. GfK Roper Reports also finds that more than 75 percent believe a healthier diet is a way to reduce stress — effectively opening the door for dairy product innovation to meet consumers’ relaxation needs.

The above insights came from the Innovation Center for U.S. Dairy® Future of Dairy research; you can learn more about these opportunity areas and others by scheduling a meeting with an Innovation Center expert (email futureofdairy@usdairy.com). In the meantime, here are a few idea starters to revive fluid milk sales:

  • Consider developing mental energy drinks.
  • Fuse milk with other high-protein products.
  • Marry tea and milk.
  • Create products that are mood changing through aromatherapy.

 Madlyn Daley is with the Innovation Center for U.S. Dairy, Rosemont, Ill.

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