The United States is no longer the melting pot it once was when its forefathers settled in this country more than 225 years ago. We no longer live in a society where "one size fits all." We're not talking just t-shirt size. This includes foods and beverages, too.
Who is the consumer?Who is the consumer you are formulating for? According to Census 2000, there are 281.4 million people in the United States, which is 32.7 million more people than in 1990, or a 13.2% increase. It is expected that the population will grow 15.5% between 2000 and 2020, with the most growth coming from individuals of Hispanic decent. In fact, from 2000 to 2020, the Hispanic population is expected to grow 4.5 percentage points, whereas whites will increase only 3.9 percentage points, Asians 2.5 and blacks, a mere 1.7.
Dairy foods manufacturers cannot afford to ignore the Hispanic population. According to the Food Marketing Institute (FMI), Hispanics, who tend to eat at home more than other ethnic groups or races, spend about $117 weekly on groceries. The rest of America's weekly grocery bill totals about $87. Part of this is due to Hispanics' focus on the family. They tend to prepare traditional foods from scratch at home, with frequent holiday and cultural events commanding large family-gathering celebrations where food is the focal point.
The growth in the Hispanic population presents two opportunities for dairy foods manufacturers. The first is to develop and market products that cater specifically to Hispanic shopping habits and culture. This includes bilingual labels and flavors that Hispanics are familiar with. For example, Kraft Foods, Northfield, Ill., recently debuted a bilingual frozen Kraft pizza and individually wrapped cheese slices called Manchego, which sport more Spanish on the labels than English.
The other opportunity is to develop products that appeal to the culinary influence this group has on the total population. Examples include dulce de leche-flavored dairy products, including ice cream, refrigerated yogurt and milkshakes. H?en-Dazs, the original dulce de leche ice cream, now offers a Tres Leche ice cream flavor, which translates to Three Milk Cake. Other Hispanic-related flavors emerging into the food and beverage scene include mango, guava and tamarind.
Another important consumer segment to focus product development efforts on is Tweeniors, individuals aged 55 to 70 years old who believe they are too young to be categorized as seniors. According to Garrity Communications, Ithaca, N.Y., tweeniors are wealthy, active and living vibrant lifestyles. It is estimated that there were 35 million tweeniors in the United States in 2002, and by 2020 this number will increase 77.1% to 62 million.
To give you an idea of how this group resists aging, consider this fact: Plastic surgery has increased 200% since 1995. Plastic surgery is no longer a Hollywood phenomenon; rather everyday grandmothers and grandfathers around the country are embracing it.
Indeed, today's grandparents are nothing like their grandparents. Grandparents historically retired and reduced their spending because they relied on a fixed income, often based solely on social security. Times have changed, and in fact, tweeniors, who often continue to work in some capacity, frequently a lucrative one, have a household income that is about 10% higher than the total population. Their net worth is highest among any age group, while their household debt is among the lowest, reports Garrity Communications.
There is a lot of money being spent by tweeniors, with this group very willing to buy products designed exclusively for them and their needs. This includes foods and beverages designed to enhance wellness and improve energy.
The last consumer segment that marketers need to pay attention to is the underage consumer, specifically children under 12 years old. While parents are still gatekeepers, kids under 12 tend to be very involved with food and beverage purchase decisions, with that involvement beginning as soon as they can speak, or for that matter, point.
The Dannon Co., Tarrytown, N.Y., was right on target when it created the very flavorful and boldly colored Danimals[r] brand of yogurt products, particularly the drinkables. With most U.S. adults unfamiliar with drinkable-style yogurts, Dannon Danimals Drinkables targets the youngest consumers. By making drinkable yogurt a part of children's lives from early on, they most likely will remain consumers as they mature.
Companies such as International Dairy Queen Inc. (IDQ), Minneapolis, recognize the growing and financially powerful tween (8- to 12-years-old) consumer segment. And fortunately for IDQ, ice cream happens to be a favorite snack and dessert for tweens.
"Dairy Queen believes that the best way to make products for tweens is to ask them what they want and get them involved in the product development process," says Patty Halvorson, dir. of national and local promotions. "That's how the DQ[r] Crew came to fruition." The DQ Crew consists of about 90 fifth and sixth graders located in Minneapolis, Seattle and Atlanta.
"When the kids met in their respective cities for the first time last year, they helped us decide on the new Blizzard[r] flavors that will be debuting at DQ locations nationally this month," says Halvorson. "The new flavors are targeted to tweens, and are only available for a limited time (two to three months)."
The inaugural flavor is The Cotton Candy Blizzard, which features DQ soft-serve mixed with cotton candy sprinkles and cone flavorings. For the two Blizzard flavors following Cotton Candy, DQ has partnered with major candy manufacturers for special flavor effects. In August and September, DQ locations will feature the Bubble Tape[r] Bubble Gum Blizzard, which is made with creamy DQ soft-serve blended with Bubble Tape bubble gum flavor and bubble gum flavor popping candy. For Halloween time, there will be the DQ Caramel Apple Pop Blizzard, which is made with soft-serve mixed with caramel and green apple flavoring and is served with a Tootsie Apple Caramel Pop[tm].
When it comes to formulating for kids, it is important to keep in mind childhood obesity concerns. Food manufacturers must be proactive in their offerings. While foods must appeal to kids, they should also be formulated so that when part of a balanced diet, they don't pose a risk of contributing to unnecessary weight gain. After all, it is no fun for any product to be singled out by a consumer activist group. Take it from the Oreo, which now feels rejected by Californians.
Today's food trendsWhen carousing the IFT Food Expo floor researching and sampling exhibitors' fare, keep in mind the three most important consumer segments to be formulating for, and also factor in these three trends influencing consumer food choices: snacking, seeking wellness and lowering carbohydrates/sugar. With all of these trends, convenience rules.
Many of today's fast-paced consumers graze throughout the day, replacing one or more of the traditional three daily meals with a snack. What constitutes a snack food varies by user, presenting an incredible opportunity for dairy foods manufacturers to offer their wares in convenient, portion-control packaging in order to appeal to on-the-go consumers.
The wellness trend plays into snack foods, too. Because when it comes to seeking wellness, consumers know that foods should be their first choice for nutritional needs. In fact, according to a HealthFocus International 2003 study, 10% of shoppers always choose foods for health reasons, while 59% usually do and 25% sometimes do. Only 6% rarely or never select foods because of their nutritional value.
With dairy foods inherently nutritious, it is quite easy to make them even more healthful through the addition of better-for-you ingredients. Besides the obvious option of fortifying with vitamins and minerals, other frequently added ingredients include fiber, probiotic cultures and whey proteins. There's also the opportunity to produce a lutein-supplemented cultured dairy product for eye health, or an added-choline creation for improved memory.
Some marketers think that consumers don't care about foods' fat content anymore. This is untrue. Consumers continue to read labels, and fat remains their No. 1 nutritional concern, according to FMI's 2003 Trends survey (see graph). Consumers are, however, not very forgiving when it comes to lower-fat foods. They also want more from their foods. Taking only the fat out is not going to cut it.
The other leading nutrition concern is carbohydrate/sugar content. According to FMI, since 1999, the number of consumers concerned about the sugar content of their foods has doubled, growing from 9% to 18%. Much of this growth comes from the popularity of low-carbohydrate dieting, as well as the increase in the number of diabetics in the United States. What will drive this trend to include the general population is the current obesity issue, as calories from carbohydrates make people fat too, something that was forgotten during the fat-free frenzy 10 years ago.
A November 2002 report published by global and investment banking and securities firm UBS Warburg examines the financial risks food and beverage makers face as public anger about obesity translates into lower sales or more regulation. The reports says that "The food and soft drink industry will, in our opinion, have to change the products they sell, the way they label them and the way they market them."
When it comes to reducing sugar content, the array of high-quality and well-performing, low-calorie, low-carbohydrate sweetener alternatives available to dairy foods product developers make this more feasible.
Happy ingredient shopping at IFT!