Where's Milk in the Functional and New-age Beverage Businesses?

August 1, 2005
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The wellness/functional beverage segment is on track to account for 85% of incremental beverage sales growth by 2008, replacing carbonated soft drinks as the largest non-alcoholic beverage category, according to New York-based Beverage Marketing Corp. The three fastest-growing areas from 2004 to 2008 are projected to be ready-to-drink sports nutrition beverages (up 86%), nutrient-enhanced drinks (up 84%) and energy drinks (up 69%). Almost all of these beverages are shelf-stable and sold in single-serve bottles.

When it comes to shelf-stable beverages in the wellness/functional category, dairy has great untapped potential. Marketers of these beverages range from large drug conglomerates to new-age beverage entrepreneurs, manufacturers who are taking advantage of milk and its healthful halo. Yet dairy manufacturers are in possession of an ingredient (milk) that is capable of raising the bar on what a wellness or new-age beverage should taste like and contribute to the diet. This is an opportunity that the dairy industry cannot afford to miss. Just take a look at all the places dairy could be.

For example, Ross Products Division of Abbott Laboratories, Columbus, Ohio, recently rolled out a nutritional beverage formulated specifically for pregnant and nursing moms. Ensure® Healthy Mom™ is a shelf-stable shake that is sold in four-packs of 8-oz plastic bottles. The only milk ingredient in this beverage is calcium caseinate. Opportunities exist for similar products, but with more dairy ingredients, and maybe even sold fresh in a chilled beverage cooler.

Ross offers a similarly processed and packaged nutritional beverage for children ages 1 to 10 years old. This beverage-PediaSure®-is made with whey protein concentrate.

EAS Inc., Golden, Colo., offers an adult "balanced nutrition shake" that contains more dairy. One will find in the ingredient legend of new Body for Life™ the following: protein blend (whey protein concentrate and milk protein concentrate). Unfortunately, the dairy ingredients are not touted on the labels of this 11-oz aseptic beverage box. Imagine the opportunity to highlight the dairy component in such beverages. Dairy's healthful halo can only make such nutritional beverages more attractive to consumers seeking out health and wellness foods and drinks.

Snapple Beverage Corp., White Plains, N.Y., a part of the world's number-three soft drink company Cadbury Schweppes plc, is a new-age beverage manufacturer that prides itself on unique flavor combinations. Many Snapple® beverages are based on tea. The company also markets a line of energy drinks under the brand elements®. Described as a blend of juices from concentrate infused with herbal extracts and natural flavors, a few varieties include skim milk and/or cream. Because the dairy ingredients are not flagged anywhere on product labels other than appearing on ingredient statements, it may be that the

primary reason Snapple includes dairy ingredients is for the creamy appearance, flavor and mouthfeel they contribute to the formulation.

The situation is similar for Mistic Brand Inc., also part of Cadbury Schweppes. The independent company markets a line of Mistic®-branded beverages simply described as juice drinks. One variety, Lotta Colada, includes skim milk and cream in order to achieve that colada-like appearance and richness.

Finally, here's a product with an interesting twist: Cal-C® from Nutrijoy Inc., Manhattan, Kan. This beverage boasts the fact that it is made with 7% skim milk, in addition to 15% juice and other ingredients.

There are many opportunities to market the addition of dairy ingredients in wellness/functional beverages. For example, beverage marketers can include proprietary dairy protein brands and/or logos on product labels and in the ingredient statement. They also can communicate the nutrition benefits of dairy proteins.

With whey, targeting specific demographics presents an incredible opportunity. Bodybuilders and fitness enthusiasts, for instance, can be educated on the benefits of whey protein for building and preserving lean muscle mass. A similar message might also appeal to other demographics.

Dairy Management Inc.™ (DMI) is actively working with industry to identify ingredient-focused nutrition research to enable meaningful consumer benefit claims for dairy ingredients. The time is right to begin formulating beverages with dairy ingredients.

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