The world of cultured dairy is a big one and the shelves are crowded. Health experts continue to tout the many benefits of consuming cultured dairy, including gut health and weight management. This past year some interesting trends have emerged that are poised to help grow and diversify the category even more — bold flavor innovation (including savory flavors), a growing interest in drinkable yogurts and an increase in whole-milk cultured dairy products.

These trends have sparked plenty of product innovation over the last year. Look down the dairy aisles and you will find a slew of new options — drinkable yogurts and kefirs in unique flavors, creative yogurt mix-ins, flavors that play with sweet and spicy, and several whole-milk yogurts, kefir and cottage cheeses. 

“We expect to see a rise in savory and spicy dairy recipes, as consumers continue to explore adding cultured foods to their diets given all of the health benefits,” said Derek Miller of Lifeway Foods, Morton Grove, Ill. “With a growing concern about added sugars, consumers are looking for different options and avenues to consume their favorite foods – kefir included.”

“Consumer interest in cultured products is growing all over the grocery store,” said Doug Martin, director of marketing in the yogurt division of Minneapolis-based General Mills (which owns the Yoplait brand). “From the growth of kombucha and kefir in beverage to fermented cultured products like kimchi and pickles, to the continued steady growth in yogurt, consumers seem to be increasingly aware that cultured food can help them to maintain a healthy gut.”

Michael Neuwirth, senior director of public relations for The Dannon Co., White Plains, N.Y., said, “Shoppers are hearing more and more about the benefits of fermented foods, probiotics and ‘good bacteria’— and how foods like yogurt can benefit their health.”

He added, “Americans are also looking to consume more protein and yogurt is seen as a good source of protein. We’re also seeing consumers incorporating more mix-ins into their yogurt like cereal, nuts, fruits and enjoying yogurt for its inherent health and nutrition benefits.”

Yogurt sales steady, cottage cheese ticks up

Sales for yogurt remain steady, while cream cheese and dip sales are going up. In the yogurt category, dollar sales were up 3% to $7.6 billion and unit sales increased 1.2% to 5.1 billion, according to Information Resources Inc. (IRI), Chicago, for the 52 weeks ended Feb. 21, 2016.  In the cottage cheese segment, dollar sales were up just 1.2% to $1.1 billion, but unit sales jumped 7.2% to 432.6 million. That suggests that retailers (or dairy processors) can’t raise prices.

In the refrigerated dips category (which includes dairy and non-dairy product lines) dollar sales increased 4.7% to $813.5 million and unit sales were up 2.5% to 277.4 million. Also remaining steady was sour cream. Dollar sales improved 3.2% to $1.1 billion and unit sales rose 2.7% to 613.6 million. The cream cheese category is the only cultured category that’s slightly struggling. Dollar sales were up 1.4% to $1.5 billion, but unit sales dropped 0.1% to 663.2 million.

According to Chicago-based Mintel’s 2015 Yogurt and Yogurt Drinks report, spoonable and drinkable yogurt segments are both expected to see growth through 2020. While Greek-style product interest will remain, other yogurts are headed into the spotlight to help support yogurt’s long-term future growth. 

Sweet gives way to savory

Dairy processors should take note — consumers are showing interest in savory flavors. When people think of yogurt, they usually associate it with sweet flavors. The most popular flavors remain the standards like strawberry, blueberry and vanilla. But the world of yogurt flavor innovation is becoming quite diverse as consumers’ interest in unique flavor combinations continues to grow.  And now savory flavors are on consumers’ radar.

While the majority of leading yogurt flavors are sweet, the spread of savory offerings at foodservice and retail may portend the next shift in the category, according to Mintel’s 2015 Yogurt and Yogurt Drinks report.

Beth Bloom, food and drink analyst for Mintel, told Dairy Foods, “Consumer palates appear to be expanding, moving into more complex flavor profiles like spicy and bitter. I think there’s some influence from international food trends introduced through foodservice.”

The trend opens the door for interesting product innovation and could help expand the category.

Bloom said “it will attract attention due to interest, help the market combat sugar concerns and expand eating occasions.”

Such a shift can attract attention to the category through the offer of a different taste profile and product innovation, along with expanding eating occasions, to make the products relevant across day parts, according to Mintel.

For some of the processors we spoke with, they are keeping a close eye on the savory trend. They are intrigued by it, but admit it’s unpredictable at the moment.

Sara Talcott, vice president of marketing and communications for Maple Hill Creamery, Stuyvesant, N.Y., said, “We think that savory yogurts are still quite a new concept for the average American yogurt shopper in terms of eating for snacking, or swapping out for sweetened/fruit-based yogurts. Culinary uses and angling toward the trend-savvy type of consumer is the early way in for premium savory product.”

She added, “There’s still a lot of room to grow, but I don’t think it will necessarily follow the same type of other trend trajectory, such as 100-calorie or Greek. Probably more in line with indulgent yogurts – more of a basket-add or occasion product than a staple, repeat yogurt purchase.” 

Neuwirth noted how yogurt’s versatility makes it easy to enjoy “cross-culturally in many different ways around the world. The interest among shoppers in the United States for new savory varieties today is very limited, but we can imagine it growing.” 

General Mills’ Martin believes that savory yogurt will likely come to [grocery stores] and eventually be successful, but he added, “The challenge we are finding is that consumers’ current expectations when standing in the yogurt aisle in this country are almost exclusively sweet.”

Yogurt gets some sweet heat

Savory flavors have already been popular in ice cream for a while (especially among artisan ice cream makers) and have even made their mark in cream cheese and cottage cheese. But recently, these sweet and savory combos are showing up in mainstream yogurt, too.

“Consumers, especially Millennials, are looking for something with a ‘kick’ (like with spice), and something fun to eat—like with Flip,” said Michael Gonda, vice president of communications at Chobani, Norwich, N.Y.

As part of its 2016 product release, Chobani launched two Flip flavors that feature unique savory and sweet pairings — Sriracha Mango (which features mango low-fat yogurt with sriracha-coated rice crisps, mini sesame sticks and roasted and salted cashew pieces) and Chipotle Pineapple (which features pineapple low-fat yogurt with chipotle granola, smoked almonds and pumpkin seeds).

Chobani has delved into savory flavors previously. Menu offerings at its SoHo yogurt shop (which opened in New York City in 2012) include plain yogurt topped with hummus, olive oil, a spice mix and lemon zest, and an offering featuring red pepper harissa, feta cheese, fresh mint, sea salt, black pepper and pita chips.

Aussie-style yogurt maker, Noosa Yoghurt, Bellvue, Colo., included a blackberry serrano flavor (what the company calls a “sweet heat”) in its 2016 product release. The flavor is available exclusively in Colorado, Noosa’s home state.

Creative flavor combinations

Some of these creative flavors, including savory, are showing up in lesser-known brands as well. Boston-based Saga Dairy Inc.’s Viking Icelandic yogurt features a cucumber mint flavor. New York-based Choopoons, which makes Mediterranean-inspired spreadable yogurts and yogurt smoothies, features exotic flavors like rose petal, barberry and yellow cherry. The company said its yogurt can be used as substitute for cream cheese, sour cream, mayonnaise and Greek yogurt.

“Consumers are getting bored of the same flavor profiles and they are seeking something more exciting and exotic. Savory fills that need,” said Jesse Merrill, co-founder and CEO of Los Angeles-based good culture cottage cheese.

Other companies are going the route of an exclusively savory focus or line up, ditching sweet altogether.

New York, N.Y.-based Blue Hill, which makes yogurt with milk from grass-fed cows, created vegetable-based flavors in six varieties: carrot, beet, tomato, butternut squash, sweet potato and parsnip. 

Brooklyn, N.Y.-based Sohha Savory Yogurt produces Lebanese-style savory yogurt with no additives or sugar — it’s made with just milk, cultures and sea salt. Sohha sells two varieties — original (which is like creme fraiche) and tangy (a different culture is used to create a smooth and pungent flavor). The company also sells savory dip toppings and yogurt drinks. The yogurt is sold at Whole Foods and specialty stores in New York City and at Whole Foods in Massachusetts and Connecticut.

The company got started in 2013 at farmers’ markets and then opened a yogurt stand at Chelsea Market in New York City. There it sold yogurts topped with olive oil infused with the company’s own spice blends. The company’s first independent store opened early March in New York.

“I am Lebanese and have always eaten yogurt savory, with oils, olives, za’atar and sumac,” said Angela Fout, who co-founded Sohha with her husband John. Za’atar is Middle Eastern spice mixture and sumac is a Middle Eastern spice with a sour, fruity and astringent flavor.

“I think we are only seeing the beginning as the major players have yet to truly get behind these [savory] products. We will see a lag, similar to the late adoption of Greek yogurt, and then it will be an explosion,” said Fout.

Mintel said there’s definitely opportunity for savory yogurt to attract additional attention to the category. The issue for this savory yogurt trend will be whether it can be seen as more than just a novelty. Time will tell.

Beyond the yogurt aisle

While it may be new to yogurt, savory flavors have been a staple in cream cheese and sour-cream based dips for a while. But companies are starting to add even more spice to the mix, like jalapeno (see Kraft’s Philadelphia cream cheese) and other vegetable and spice blends. Spicy is definitely in. Cottage cheese and cream cheese manufacturers are looking to reposition their products and grab renewed interest through new concepts and flavor innovation.

“Proliferation of flavors is driving category growth. [While] exotic (like tropical) fruit flavors are trending for yogurt. [In] dips and cream cheese, new items reflect the growth of spicy foods across various categories,” said Liberty Sveke, brand manager for Arla Foods Inc. USA, Basking Ridge, N.J.

Arla Foods introduced a line of cream cheese at the beginning of the year that included peppercorn, herbs and spices, and blueberry flavors.

good culture, which makes flavored cottage cheeses (including savory), recently relaunched its line nationally in updated packaging with a new recipe made with whole-milk. The cottage cheeses are available in five flavors, including sundried tomato, Kalamata olive and strawberry chia.

The use of Greek yogurt in dips, whether as a lower-fat base or to help boost the protein content, is another way yogurt processors are branching out in the grocery store.

Chobani will move beyond the yogurt aisle with a new line of savory Greek yogurt dips called Chobani Mezé Dips in June. The non-GMO Mediterranean-inspired dips will come in four flavors, including three-pepper salsa, roasted red pepper and chili lime.  A 1-tablespoon serving contains 25 calories, 1 gram of fat, 1 gram of sugar and 3 grams of protein.

“Americans are hungry for better options across eating occasions and across categories. One thing we’ve seen is that they’re becoming more familiar with Greek yogurt as we continue to grow the category and inspire new ways to enjoy it,” said Gonda. “In other parts of the world, yogurt is a staple in savory and sweet foods alike — eaten with a spoon or with a straw.”

Whole-milk dairy making a comeback

Many of the cultured dairy processors we spoke with mentioned another definitive trend hitting the cultured dairy aisles — whole-milk options. The outlook on dairy fat is changing, with many taking the stance that “fat is good.”

“More consumers are shifting towards whole milk cultured options as they continue to seek out products that are less processed and filled with whole, real ingredients,” said good culture’s Merrill.

Lifeway Foods’ Miller said, “Whole milk dairy products are definitely on the rise, thanks to studies showing that a little added fat might actually be good for you. Consumers are demanding more minimally processed “whole” foods, and the market is going to respond.”

Lifeway introduced organic whole-milk kefirs to its line this spring in four varieties, including strawberries and cream, coconut and cream and lemon meringue.

Ana Milicevic, brand manager for Stonyfield, Londonberry, N.H., said, “While on the one hand, there are a number of dairy products moving into the realms of unique flavors, we’re also seeing a return to yogurt at its most natural. That includes a rise in whole-milk and grass-fed dairy.”

Stonyfield recently launched a 100% grass-fed organic whole-milk yogurt (in four varieties) and a whole-milk Greek yogurt line (in two different cup types – the traditional cone cup for plain and vanilla and the split cup for the flavors with fruit.)

“We’ve noticed a big increase in whole-milk products, especially in the yogurt category,” said Maple Hill’s Talcott. “We partnered with Stonyfield to launch [the] whole-milk 100% grass-fed yogurt, which is [available] nationwide as a Whole Foods Market exclusive.”

Maple Hill Creamery also launched an organic, 100% grass-fed whole-milk drinkable kefir line earlier this year. It’s available in three varieties: strawberry, vanilla and plain. 

As part of Chobani’s big product release in January, the company added whole-milk Greek yogurt options — 16-ounce containers of honey and vanilla, which joined the existing plain variety.

Icelandic-style yogurt maker, Smari, Petaluma, Calif., which launched whole-milk options in early 2015, added four new flavors last fall, including pineapple, black cherry chia and New Orleans coffee.

Convenience trends drive drinkable yogurt sales 

In this day and age where convenience is king, drinkable yogurts and kefirs offer an easy on-the-go option for snacking and easy-to-consume protein — and consumers are really starting to take interest. In the shelf-stable yogurt/yogurt drinks segment, dollar sales jumped 36.9% to $19.7 million, and units increased 24.9% to 10.6 million, according to IRI, for the 52 weeks ended Feb. 21, 2016.

According to Mintel, yogurt drinks’ growth rate is forecast to stay ahead of spoonable yogurt as the novelty of Greek yogurt subsides.

Drinking yogurts and fermented beverages accounted for 8.5% of total global dairy launches, according to Innova Market Insights in the 12 months ended October 2015. The drinking yogurt market is attempting to move on with new formats and target markets, although the focus on the health aspects of yogurt remains strong. Over 80% of global launches recorded in the same time period above featured health claims of some kind, rising to 98% in the United States.

According to Innova, there are indications that the market is moving forward, with a particular focus on yogurt and fruit blends in a smoothie format. There has also been a rising interest in yogurt-style fermented drinks that has brought products such as kefir, lassi and ayran into mainstream markets in non-traditional regions.

This July, Chobani will be launching Drink Chobani, the company’s new Greek yogurt beverage. The  drinks are made with crushed fruit blended with yogurt and will come in four varieties: strawberry banana, apple cucumber spinach, mango and mixed berry. A 10-ounce serving contains 14 grams of protein. The on-the-go drinks will be available nationally in July.

Dannon, which has been making drinkable yogurts for children for a while, introduced portable Light & Fit protein yogurt smoothies last year. A 9.5-ounce serving (one bottle) contains 12 grams of protein. 

“Drinkable cultured dairy is a rapidly growing segment in both the kids and adult markets,” said Dannon’s Neuwirth.

LaLa, a brand of Borden Dairy, Dallas, makes drinkable yogurt smoothies and Greek yogurt smoothies. It  recently expanded its distribution nationally, backed with a national marketing campaign.

“[We’re] seeing an increase in yogurt smoothies. The yogurt smoothie products are driving growth with 11.5% year-over-year dollar growth versus only 2.7% for the blended smoothies or cup yogurts [according to IRI data]. Meanwhile, LaLa Yogurt Smoothies have experienced a 23.1% growth,” said Desiree Johnson, director of marketing for LaLa.

With cottage cheese companies stepping up the their game, yogurt beverages really starting to take off and yogurt processors finding new ways to keep yogurt in consumers’ diets all day, the future looks really bright for cultured dairy.