Cultured products continue to grow with a lineup of better-for-you products that mimic a just-as-good taste.

It’s no surprise that yogurt sales are through the roof. Scientific advancements allow processors to develop yogurt with probiotics, fiber, live active cultures and so on.

And to some in the industry, these enhancements aren’t just a trend – they’re a way of life.

“Better-for-you foods and foods with functional benefits continue to grow in the U.S. as consumer interest in healthful foods and lifestyles expand,” says Michael Neuwirth, senior director of public relations for the Dannon Co., maker of Activia and DanActive, which contain proprietary cultures for specific functions.

According to Chicago-based Information Resources Inc., yogurt sales lead the pack in terms of the cultured products market as a whole, raking in a 3.3% rise in sales and a 2% increase in unit sales, as of Aug. 9. Although refrigerated dip brand sales are up 3.8%, the category broke even in unit sales.

These stats pale in comparison to their counterparts, such as cottage cheese, which plummeted 5.8% in sales and dropped 4% in unit sales, while sour cream barely eked out a 0.6% rise in sales and ended with a mere 1.4% increase in unit sales, IRI data says.

Yogurt heats up

Refrigerated yogurt continues to dominate the market and market growth, according to a November executive summary published by Chicago-based Mintel Group. The survey says primary gains came from yogurt with pro-health positioning, such as digestive health, which accounted for 10% market share, and organic and natural claims, which contributed to 12% total sales.

That’s because several processors are heating up the fridge with healthy and innovative products.

For instance, Dannon extended its Activia portfolio to include Activia Fiber yogurt, which has been scientifically proven to help slow intestinal transit when eaten daily for two weeks, the White Plains, N.Y.-based company says.

“Beginning in 2006, Dannon’s Activia introduced probiotics to a mainstream consumer audience and began a conversation about how yogurt and other products can deliver clinically proven, functional benefits,” Neuwirth says. “Since then, additional probiotic products, such as DanActive, and the new products we introduced this year, Activia Fiber and Activia Drinks, have helped us extend the benefits of probiotics to a wider consumer audience.”

The yogurt producer also developed the child-centric Danimals Crush Cups, a low-fat yogurt offering that delivers vitamin D and calcium in Strawberry Smash, Blueberry Blast, Cherry-licious and Strawberry-Banana Slam flavors. “With the Danimals Crush Cup, we’ve eliminated the need for kids to use a spoon,” Neuwirth says. “Crush Cups provide a fun snacking experience that moms feel good about too.”

Dannon also has revamped some of its packaging. “We recently introduced 4-ounce multi-packs for our Light & Fit brand, which are a more economical and convenient choice for consumers and easier to stock for retailers,” Neuwirth says. “The multi-packs also use form-filled-sealed technology, which uses significantly less plastic to produce.”

For its part, Horizon Dairy launched a value-added yogurt option that’s made for toddlers. The Little Blends line combines organic whole milk yogurt with natural fruit and vegetable purees to deliver a daily value of 20% calcium, 25% protein, omega-3 DHA and protein.

“Horizon will continue to focus on meeting the needs of families, as moms continue to look for easy ways to feed their children nutritious food,” says Sara Loveday, marketing communications manager for the Broomfield, Colo.-based processor, part of Dean Foods’ WhiteWave-Morningstar division. “In addition, we will continue to invest in our category to educate consumers via advertising, online outreach and more.”

Meanwhile, General Mills’ Yoplait line now includes YoPlus Light, which contain a blend of probiotic cultures and a natural dietary fiber with 36% fewer calories. The line comes in Light Key Lime Pie, Light Honey Vanilla and Light Strawberry Banana varieties.

“Early in 2009, the Yoplait Light Thick & Creamy line added Cinnamon Roll and Cherry Cobbler varieties. Yoplait Original yogurt launched three new 99% fat free superfruit-flavored yogurts: Cherry Pomegranate, Blackberry Pomegranate and Blueberry Açai,” says Zoe Schwartz, marketing representative for Minneapolis-based General Mills, owner of the Yoplait brand. “Fiber One Yogurt also debuted in four delicious flavors and just 50 calories per serving. And Yoplait Delights yogurt parfaits launched this fall, a creamy blend of layered yogurt flavors, such as Chocolate Raspberry, Lemon Torte, Triple Berry Crème and Caramel Crème.”

Furthermore, Prairie Farms Dairy touts its new line of yogurt with a “Look Good. Feel Good” slogan. The Fat-free Light option is only 90 calories and comes in 14 new flavors, while the 99% Fat-free Original variety is available in 13 flavors from the Carlinville, Ill.-based cooperative.

In December, Organic Valley plans to introduce a live, organic, low-fat, pourable yogurt in a 32-ounce bottle that contains Thrive, which is the La Farge, Wis.-based company’s proprietary blend of billions of good probiotic cultures.

“Our ‘Thrive’ concept is unique in its use of certified organic milk, a prebiotic inulin to assist with the growth of the beneficial probiotic bacteria in the gut, as well as an aid in calcium absorption,” says Eric Newman, vice president of sales for Organic Valley and Organic Prairie Brands, “and uses solely Agave syrup, a low glycemic index sweetener.”

The Berry flavor is made with agave nectar and bursts of whole berry puree while the Vanilla variety is made with agave nectar and Fair Trade vanilla. The line also includes a Plain option. In addition, the yogurts contain no added gums or stabilizers, are an excellent source of fiber and calcium and each serving contains 2 grams of organic inulin, per a company press release.

Dipping into goodness

Because more and more consumers are eating in versus going out, dip makers are beefing up their product lines to provide them with some at-home indulgence.

Reser’s Fine Foods, for example, introduced Stonemill Kitchens, a line of premium refrigerated dips that are made with real parmesan and mozzarella cheese, artichoke hearts, shrimp and pepperoncinis, in the same family as bell and chili peppers.

“Stonemill Kitchens is available in eight parmesan cheese or sour cream-based recipes that can be used straight as a chip or vegetable dip, or used in appetizer or main course recipes as a topping or ingredient,” says David Lakey, vice president of marketing for the Portland, Ore.-based company.

The line is available in Artichoke & Parmesan, Three Cheese Pepperoncini, Spinach & Artichoke Parmesan, Seafood & Parmesan, Artichoke & Jalapeño, Cajun Seafood and Crab & Roasted Corn varieties.

In the meantime, T. Marzetti Co., Columbus, Ohio, launched three new flavors to its Hummus Veggie Dip line, which is comprised of pureed chickpeas, lemon juice, garlic, sesame tahini and various spices and flavorings. Featured in 11-ounce containers, the line now offers Black Bean, Garden and Southwest Chipotle flavors.

For its part, Heluva Good created White Cheddar & Bacon and Jalapeño Cheddar sour cream dip flavors, both delivering a clump of spice in a creamy texture.

On the other hand though, dip manufacturers continue to face oncoming challenges, sometimes without warning. Food safety, for instance, is a constant challenge, Lakey says.

“Many large customers want preservative-free labels, long shelf life and a winning low-bid product cost, but it is impossible to deliver on all three simultaneously,” Lakey says. “Many decision-makers lack the basic science understanding to develop products as safe as they could be.”

Plus, home-office merchandisers continue to make demands about programs, payments and support materials from the vendor, Lakey adds, that there’s often a lack of pristine control. “Many operator cultures give wide latitude to store management to opt out of distribution, promotions or pricing guidelines,” he says. “Either store training and discipline should improve or expectations at the headquarter level should be adjusted.”

Regardless of how the dip community churns out, the overall outlook for this category remains healthy. “New technologies and flavors will add product news to the category,” Lakey says.

Dollop of digestive health

While yogurt and dip processors are churning over thanks to high sales margins, cottage cheese makers are doling out products that offer similar health-enhancing characteristics as its dairy counterparts in hopes of boosting their numbers.

For example, Friendship Dairies offered a lineup of all-natural cottage cheese products, containing live probiotic cultures and prebiotic fiber. The Digestive Health option is made with low-fat milk and one-half cup delivers a good source of calcium, prebiotic fiber and protein. Additionally, the enriched prebiotic fiber from chicory root helps stimulate growth and increases calcium absorption and bone health.

The Jericho, N.Y.-based unit of Dean Foods also offers Digestive Health 2%, which is a low-fat, small curd cottage cheese that comes in a 16-ounce container.

There is an increased consumer demand for products that provide more natural attributes and contain functional nutrients that deliver healthy benefits, says Paige Pistone, director of marketing.

Meanwhile, cream cheese producers are experiencing a similarly lumpy outlook.

According to Chicago-based Mintel, cream cheese sales are expected to surpass cottage cheese as the third largest segment due to a 4.4% growth in sales in 2009 and projected year-over-year increases through 2013.

That’s because the increase in at-home and recipe usages help bump growth in this category, says Donald King, vice president of marketing, cheese and dairy, for Kraft Foods, Northfield, Ill.

As a result, Kraft introduced Spinach Artichoke and Tomato Basil varieties, along with Bagel-fuls, which feature Philadelphia Cream Cheese in a hot breakfast-on-the-go format, King says.

“Traditionally the two core usages for cream cheese have been for spreading on bagels and baking in cheesecakes,” he says. “We have increased our marketing of the brand by providing consumers with more cooking recipes and expanded usage ideas. In addition to the focus on cheese in recipes and meal solutions, the category is also experiencing growth in snacking.”

In September, Kraft launched a new marketing campaign for Philadelphia Cream Cheese, “Spread a Little Philly,” which strengthened the focus on new usage occasions for the brand, King says. “Our aim is to move consumers beyond the morning bagel from spreading to dipping and baking to cooking,” he says. 

On the other hand though, the natural debate may be part of the problem as to why sales are uncharacteristically down because it presents some consumer confusion, says Organic Valley’s Newman.

“Some brand marketers are switching their positioning to parlay their brand awareness and equity into new products by boasting the ‘natural’ claim, and this confuses consumers who may assume that ‘natural’ is regulated, when the opposite is true,” he says. “Organic Valley continues to educate and encourage consumers to look for certified organic products, which are third-party verified and regulated by one of the strictest agricultural standards in the world. The USDA organic seal is the only way that a consumer can know for certain that a product is produced without antibiotics, synthetic hormones and pesticides.”

Regardless of how it’s spread or spooned, these processors don’t let a little decline in numbers get in the way of producing digestive-enhanced items complete with fruity flavors.

Fast Facts

  • The cottage cheese segment is expected to experience a 2.3% loss of sales in 2009 and continue to lessen through 2012.

  • Cottage cheese appeals to mature females and middle-aged couples. However younger consumers are the least likely to eat cottage cheese.

  • Cream cheese and cream cheese spreads are expected to surpass cottage cheese as the third largest segment due to a 4.4% growth in sales in 2009 and projected year-over-year increases through 2013.

  • Cream cheese’s consumer base has expanded nearly 80% to include married couples with and without children.

  • Presence of children plays a positive role in the consumption of cream cheese.

  • Women (67%) continue to be the primary consumer of yogurt over men (42%).

  • Flavor and availability are the top desirable attributes. Meanwhile, factors such as cost, low fat, texture, portability, presence of live cultures, protein and probiotics are deemed important.

    Source: Mintel

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