Milk processors market dairy beverages as workout aids, develop lactose-reduced products and more drinkable yogurts and boost the health profile with probiotics. Nondairyprocessors formulate juices and ready-to-drink teas.



These days, milk has become quite the hot-button issue. Factors such as where the milk comes from, what the correct recommended value is and even its color and flavor have raised concern among the milk-drinking community.

Likewise, many of today’s non-dairy processors have experienced similar situations with juices and ready-to-drink teas as the topic of too much sugar creates concern.

But, when it comes to milk-based beverages, there is a distinct trend that has grown over the last few years, says Jim Dimataris, director of processor relations for California Milk Advisory Board (CMAB).“We are seeing new and innovative milk-based nutrition drinks, flavored milks with no fructose corn syrup and reduced sugars as well as different varieties of drinkable yogurt, including products that are unique to different cultures,” he says. “These items fill the voids that have existed as our country becomes more and more culturally diverse, and increase sales by providing the item(s) each ethnicity is accustomed to consuming. It is also opening the door for even more products to be exported as premium brands made in the USA.”

David Freedheim, retail consultant for South San Francisco, Calif.-based CMAB, says the emerging trends in beverages are focused heavily on nutrition, such as health drinks, energy supplements and natural juices.

“Moms want easy ways to provide kids with nutritional foods and drinks they will actually enjoy. Allergies are also a consideration as more consumers claim food-based allergies of some kind (e.g., gluten free),” he adds. “The products we’re seeing at retail all fit these trends - beverages marketed as workout aids, lactose-reduced products and more drinkable yogurts, both in ethnic varieties and also for health boosting with probiotics.”

Milk is all about mom

The milk and beverage category remains a dynamic and competitive arena, says Tom Gallagher, chief executive officer for Dairy Management Inc. (DMI), Rosemont, Ill.

“Specific trends include increasing demand for functional beverages that offer specific benefits, including those related to bone health, energy and movement and those related to healthy weight/weight management; growing consumer awareness for ‘natural’ beverages. And, as we know, milk serves as the example of nature’s most perfect food with its combination of nine essential nutrients, including calcium, protein, potassium, and vitamins A and D; and continued demand for healthy and convenient products for children, including product innovation relative to flavored milk that maintains its great taste with fewer added sugars and calories,” he adds.

While nutrition poses as the leading trend in the milk category, value-added beverages also are growing in popularity, as consumers appear willing to pay the higher premiums, says Vivien Godfrey, chief executive officer of Milk Processors Education Program (MilkPEP), Washington, D.C.“Presently, there is a also a significant trend in the beverage industry towards engineered products that have been developed to answer consumers’ desire for instant gratification by delivering specific vitamins and nutrients such as vitamin-enriched waters and ‘muscle’ milk products,” she adds.In response to this ever-growing trend, Tucson, Ariz.-based Shamrock Farms launched in January a Calcium Plus milk line, which comes in whole, 2% reduced fat, fat-free white, 1% low-fat chocolate, 2% reduced fat and fat-free lactose-free milk varieties that are outfitted in a 96-ounce Smart Fit bottle, designed by ergonomic experts to be easy to carry, pour and store.

The Calcium Plus line also coincides with MilkPEP’s National Milk Mustache “got milk?” campaign encouraging families to “Pour One More.”

“At MilkPEP, we only have two targets-moms and teens,” Godfrey says. “The 2011 MilkPEP campaign, ‘Pour One More,’ offers partnership promotions to empower moms to pour one additional serving of milk each day. ‘Pour One More’ marks the second year in which we continue building upon our strong families initiative by reminding moms that one way they can build strong families is by taking the time to pour one more serving of milk to ensure that their families are receiving all of the essential nutrients that growing bodies need. As a part of this program, we have successfully brokered partnerships with [Kraft Foods’] Oreo and [Post Foods’] Post to capitalize on occasions where we know milk is being consumed-snacking and breakfast.”

Also catering to moms is Dean Foods. The Dallas-based processor reformulated its chocolate milk brands to include 10-15% fewer calories and 20-25% less sugar, says Andrea Carrothers, nutrition communications manager.

“To reintroduce consumers to our chocolate milk and remind moms of the value of chocolate milk as a nutritious option for their kids, we implemented the ‘Start Right End Right’ sweepstakes in January,” she adds. “We feel campaigns such as ‘Start Right End Right’ really speak to moms who want to start their kids’ day right with white milk and end the day right with a nutritious treat such as chocolate milk. Moms continue to demand nutritious choices for their families, and the dairy category is well positioned with some of the healthiest options in the grocery store.”

Through the sweepstakes, one winning family will receive $25,000, along with $5,000 to the school of their choice. Interested participants are to collect sweepstakes-labeled milk caps from various Dean Foods’ milk brands and enter the contest code at www.startrightendright.com or “like” the Facebook contest page at www.facebook.com/puremilkfun. The contest runs through Feb. 28. Other processors speak to mom by promoting value-added attributes.

“The industry has seen strong growth in premium value-added product offerings aimed at delivering specific benefits, whether it is in support of a day part such as the time between dinner and bedtime or refueling after strenuous exercise with chocolate milk,” MilkPEP’s Godfrey says. “Milk’s inherent health-related benefits, including added nutrients, omega-3, fiber, etc., also present significant opportunities to leverage within the category.”    

All kinds of natural

The fact that milk is a natural beverage helps boost its popularity, says Blaine McPeak, president of WhiteWave Foods, the processor of Horizon organic milk.

“Consumers continue to seek options that are all-natural, without unnecessary ingredients,” he adds. “We’ve seen this trend translate to sales within our Silk portfolio with the launch of Pure Almond, for example. Also, Fruit2Day launched two new flavors (Blackberry Currant and Pomegranate Blueberry) in 2010, which feeds into the trend of on-the-go/portable/all-natural snacks.”

That’s why the Bloomfield, Colo., company addressed this trend by launching Silk Pure Almond almondmilk, and Silk Pure Coconut as part of its plant-based portfolio.

“We’re also seeing a demand for beverages with less sugar, fat and calories, and therefore are getting ready to launch a new formulation for our Horizon single serves, which are lower in fat, lower in calories and contain less sugar,” McPeak adds. “On our Silk brand, we’ve made some changes that have helped support the brand’s continued growth, including added calcium to our Vanilla and Original Silk lines as well as reduced calories in our Silk Light product lines.”

Turtle Mountain, LLC, based in Eugene, Ore., launched So Delicious Dairy Free shelf-stable (non-refrigerated), single-serve, eight-count multi-packs of its coconut milk, which is fortified with essential nutrients, such as calcium, magnesium and vitamins A, D and B12.

“Consumers are seeking out great variety than ever,” says Chris Turek, marketing services manager. “They also are checking nutrition labels and ingredient decks, looking for products that are not only perceived as healthy, but also made with fewer ingredients.”

Searching for the perfect non-dairy drink

While the dairy market aims to meet the needs of moms, teens and everyone in between, the non-dairy beverage market also has a container full of challenges as consumers continue to search for that perfect better-for-you drink that delivers nutrition, taste and functionality.

Many of today’s non-dairy processors have formulated a host of juices and ready-to-drink teas that cater to the Every Consumer looking for the ultimate drinking experience.    “The beverage marketplace has splintered, and beverage marketers are working to deliver products that appeal to as many demographic groups as possible,” says Gary Hemphill, managing director for New York-based Beverage Marketing Corp. “The key broad beverage category consumer trends are demands for healthier refreshment and a continued focus on value.”

In response, Sunny Delight Beverages Co., headquartered in Cincinnati, is investing more than $70 million to upgrade its five North American manufacturing facilities and data systems, which would ultimately help the company continue creating and marketing more wholesome beverages for moms and teens, according to a company press release.

For its part, New York-based Dr Pepper Snapple Group Inc. is modernizing its Hawaiian Punch brand to deliver more better-for-you attributes. For instance, it’s adding the artificial sweetener sucralose, commercially known as Splenda, and a proprietary additive to enhance sweetness and help cut calories by 25%. Hawaiian Punch will now also be available in six-pack, 10-ounce bottles.Meanwhile, in April, PepsiCo, based in Purchase, N.Y., will launch a line extension of its G Series Gatorade sports drinks. G Series Fit is similar to its current G Series line in that it will include lower-calorie products for before, during and after exercise but with fewer calories.

For example, the G Series Fit 02 Perform is a lightly-flavored electrolyte drink created to maintain hydration more efficiently than water. It offers 110 milligrams of sodium, 30 milligrams of potassium and 10 calories per 16.9-ounce bottle. This segment comes in mango passionfruit, melon pear and berry acai flavors.

Lastly, the G Series Fit 03 Recover a fruit-based smoothie developed to help restore the body after a workout. Available in strawberry banana, blueberry pomegranate and mango pineapple flavors, it delivers a blend of protein (12 grams), carbohydrates (12 grams), vitamins and minerals with 120 calories per 11.16-ounce serving.

The G Series Fit 01 Prime is a pre-workout fuel in the form of small energy bites and delivers 50 calories per one-ounce piece. It comes in banana nut, cranberry pistachio and cinnamon raisin flax formulas.

Alternative to soda

“Nowadays, consumers are looking for healthier alternatives to sugary sodas,” says Henry Chen, executive vice president of SPI West Port, Inc., which is based in South San Francisco, Calif., and produces ready-to-drink teas out of its Taiwan facility. “One of the hottest and fastest growing categories in the beverage industry is the functional drink category.”

That’s why SPI West Port created the ALO line of aloe vera-infused beverages.

“Aloe vera has been shown to help promote a healthy digestive system and aid in the absorption of vitamins,” Chen says. “The ALO drink brand of seven all-natural drinks is made with real aloe vera pulp and juice straight from the aloe vera plant, not reconstituted from powder. We extract the nutrient-rich aloe pulp from the inner leaf of the aloe plant using a hand-filleting method and put it into our drinks.”This line also was created to satisfy the every-consumer because each variety meets a different function. The line includes ALO Exposed (original with honey), ALO Awaken (wheatgrass and aloe), ALO Allure (mangosteen, mango and aloe), ALO Enrich (pomegranate, cranberry and aloe), ALO Appeal (pomelo, pink grapefruit, lemon and aloe), ALO Enliven (12 fruits and vegetables and aloe) and ALO Elated (olive leaf tea and aloe).

Meanwhile, Renewal Laboratories, Inc., San Diego, introduced a lineup of all-natural bottled teas with omega-3 fatty acids.

“We see strong trends towards all-natural and organic beverages with a healthy message,” says Donald Ackley, president and CEO. “This applies to children and baby boomers equally. We have also developed a line of healthy antioxidant and omega-3 waters, which we plan to introduce in the near future.”Another trend hitting the ready-to-drink tea category head-on is the caffeine-free movement.

“In the ready-to-drink tea market, we are experiencing a higher demand for our caffeine-free organic teas from families looking for a healthy, great tasting alternative to sodas and juices,” says Jeff Stum, founder, director of sales and marketing for Rooibee Red Tea, Louisville, Ky. “Known for its cool, sweet, refreshing flavor, Rooibos tea contains powerful antioxidant properties 50% more potent than those of green tea.”This past year, Rooibee Red Tea introduced its seventh flavor, Vanilla Chai, which can be served hot or cold, Stum says. In addition, in December 2010, it launched a new package design featuring brightly colored labels and graphics that better reflect the flavors.

Also taking advantage of the hot or cold drink pattern is Smith Dairy Products Co. Last spring, the Orrville, Ohio, processor introduced an all-natural, preservative-free peach tea to its ready-to-drink tea lineup.

“It’s not an emerging trend so much as a sustained trend as consumers continue to reach for beverages with functional ingredients for a healthier lifestyle,” says Penny Baker, director of marketing. “Natural products with no preservatives and fewer ingredients are popular.”Whatever benefit consumers are aiming to gain when turning to milk and non-dairy beverages, today’s host of companies are sure to provide the ultimate drinking experience.  

Sidebar: Coffee That Inspires

Despite consumer spending cutbacks, some companies have managed to weather the storm so to speak. Such is the case for Bloomfield, Colo.-based WhiteWave Foods, the processor of Horizon organic milk, thanks to its line of creamer products, Coffeehouse Inspirations from International Delights.To capture those consumers who visit coffee houses less frequently, Coffeehouse Inspirations creamer products allow them to make their great-tasting coffee beverages at home, says Blaine McPeak, president.Then last year, it expanded that lineup to include Skinny and Breve options.

For instance, the Skinny Vanilla Latte kind offers a fusion of vanilla flavor, whereas the Skinny Caramel Macchiato option blends caramel flavor with notes of sweet cream. Both deliver 30 calories per 1 tablespoon serving.

Meanwhile, the Breve line entails Vanilla Caramel Cream, a blend of smooth vanilla, rich caramel and all-natural cream; Dark Chocolate Cream, a mixture of dark chocolate and all-natural cream; and Hazelnut Cream, which is combination of hazelnut and all-natural cream.

Sidebar: New Kind of Cup o' Joe

Some Americans cannot start their day without a cup of coffee. It doesn’t matter if it’s hot, cold, iced or frozen, some people just need that instant kick from coffee. Now, coffee drinkers can drink that cup of Joe while maintaining their health. That’s because Health is Wealth, Inc., Williamstown, N.J., launched Nutriccino and Vitamin iced coffee. This cold beverage is said to cure caffeine cravings while providing calcium, vitamin E and 100% of the recommended Daily Value of vitamins per 9.5-ounce bottle. It also contains 190 calories and 3 grams of fat.

Nutriccino comes in low-fat Mocha and Vanilla Latte flavors and also delivers the daily recommended values of vitamins A, C and D. Meanwhile, the Vitamin kind is infused with Guarana and ginseng and is available in Mocha and Vanilla Latte flavors.

School Milk and Vending

Is Chocolate Milk Expelled For Good?

Out of all of the dairy products on the market, the chocolate milk segment has garnered the most attention among parents, schools and the dairy community. Is it healthy enough to keep in schools or should it be offered in limited amounts? Does its name send off negative connotations, much like the high-fructose corn syrup controversy? And what really is the “problem” with chocolate milk? “Specific to schools, the industry must remain ever vigilant to protect and promote dairy’s place in schools,” says Tom Gallagher, chief executive officer for Dairy Management Inc. (DMI), Rosemont, Ill. “Schools offer us unprecedented access to our future consumers 180 days out of the year and we have to ensure that the product they receive meets their needs – the right products, in the right places and in the right packaging. We also must continue to innovate regarding flavored milk formulations and provide kid-approved products with reduced sugar and total calories to meet the increasingly stringent nutritional guidelines for schools.”

It’s those stringent nutritional guidelines that are forcing a ban on chocolate milk.

For instance, the Florida Board of Education voted to remove all sugary drinks in schools, including soda and flavored milk. Public school districts in Berkeley, Calif., and Boulder, Colo., removed chocolate milk from their list of daily offerings, opting for low-fat, organic white milk instead.

“Recent efforts to dramatically cut calories on the school lunch tray have caused some school districts to evaluate flavored milk,” says Vivien Godfrey, chief executive officer of Milk Processors Education Program (MilkPEP), Washington, D.C. “Many processors have, or are in the process of, developing lower-calorie formulas that provide the same great flavor students crave while providing the important nutrients they need.”

What many of today’s school boards don’t know -or fail to understand -may in fact hurt the youth of tomorrow.

“The benefits of drinking chocolate milk after physical activity is gaining popularity among high school and college athletic trainers and coaches. MilkPEP’s ‘Refuel with Chocolate Milk’ program provides important nutritional information and toolkits for trainers and coaches to share with student athletes and parents,” Godfrey says.

Organizations such as MilkPEP provide support through its “Refuel with Chocolate Milk” campaign that was created to promote chocolate milk as a recovery drink, she adds.    

“Research suggests that the combination of carbohydrates and nutrients in milk make it a natural way to replenish the electrolytes and nutrients lost during vigorous exercise,” Godfrey notes.

In addition to its many nutritional benefits, chocolate milk and other flavored milks allow the milk market as a whole to carve out additional niches and cross-promote into other categories.

“In the dairy area, low- or no-fat flavored milk is one key product to promote in place of less nutritious beverages, the No. 1 source of ‘empty’ calories (energy without nutrients),” says Robert Murray, professor of pediatrics for Ohio State University and a consultant to companies looking to improve snack foods and drinks. “My role is to work with professionals, such as RDs, MDs and policymakers, to help them understand the value of flavored milk and other dairy products and accept the need for a trade-off between some sugar, fat or sodium in order to increase the consumption of dairy as a high-nutrient product. Part of my responsibility includes promoting innovations that help lower saturated fat, added sugars and sodium.”

Some of that innovation ties in directly with the hot-button issues, such as childhood obesity and nutrition. Murray says it’s all about looking for opportunities to cut calories while improving nutritional quality.

“Products that can imitate the richness and mouthfeel of higher-fat dairy products, but deliver less fat, calories or sugar will be most valuable. Packaging and promotion will play a significant role in reaching out to this subset of teens and young adults,” he says. “Innovation for novel drinks that employ milk or milk-derived proteins or fats will be opportunities, particularly among teens.”

That’s why companies are thinking outside of the milk carton, so to speak.    

“Many processors are researching new sweeteners, ways to reduce calories in their flavored milk items, without sacrificing the flavor and price,” says Jim Dimataris, director of processor relations for California Milk Advisory Board. “This is increasingly important as more pressure is put on school lunch programs to reduce the sugar in kids’ meals with a specific emphasis being given to chocolate milk, which can affect the nutrition kids are getting each day.”

Chocolate milk may be expelled from some schools, but several organizations, policymakers, parents and even school districts are fighting to keep this dairy option in the system, even if it means changing the mathematical formula a bit.


Sidebar: Kid-friendly, state-approved

Inko’s LLC is known for its portfolio of healthy white tea options. That is until it took its products up with the state.

The New York-based company received approval from New York City’s Department of Education to sell its all-natural Poppin’ Punch and Bumpin’ Berry flavors in school vending machines. The drinks come in 12-ounce bottles and are sold nationwide.

“Kids want what they want, and delivering a low-calorie, all-natural alternative to the sugar water and diet chemicals offered to our children in years past is no easy task,” says Andrew Schamisso, founder and president. “However, under our new ‘Inko’s: Part of the Solution’ tagline, we went to the kids first, and out of a number of flavors tested, berry and punch got the thumbs up. We then put those drinks in a grab-and-go capped bottle, dressed them up with eye-catching graphics and gave both fun names.”