Like a powerful blizzard blasting the landscape, health and wellness is socking it to the dairy ingredients’ sector. But rather than snow, ice, and high winds pelting consumers, shoppers are facing a deluge of such positive elements as products that are low in sugar, high in protein, and those that contain prebiotics and probiotics.

“Manufacturers are reacting to changing consumer preferences and demand by adding additional dairy components and diversifying their product lines as people consume more dairy,” states IMARC Group, a Brooklyn, N.Y.-based global management consulting firm. “This has led to innovation in product offerings, such as lactose-free dairy products and high-protein dairy snacks to meet the needs of customers who are health-conscious and have dietary limitations.”

Shopper interest in functional dairy elements also is triggering the strong trend toward clean label and organic ingredients, which satisfy customer requests for sustainable and all-natural goods, IMARC Group notes. “The growing market demand in North America is driven by the acceptance of protein-rich dairy products and a strong focus on quality, innovation, and strict regulations across the region,” the firm states.

The dairy ingredient sector is further expanding because of greater consumer consumption of dairy-based products, IMARC states, adding that such substances as lactose, whey proteins, and milk powder are necessary for a variety of culinary selections, including baked goods and baby formula.

Yet, shoppers’ accelerating interest in dairy products with health-boosting clams is presenting strong opportunities for brands to incorporate ingredients that deliver additional wellness benefits, says Myriam Snaet, manager, market intelligence, consumer insights and competitive intelligence for BENEO GmbH, a Parsippany, N.J.-based ingredient supplier.

This includes the use of prebiotics, which are nondigestible food ingredients that promote the growth of beneficial microorganisms in the intestines, she notes. “As consumers shun certain unwanted ingredients, it means there’s a need for feasible alternatives,” Snaet states. “Ingredients that contribute to cleaner labels and healthy nutritional profiles while also offering sustainable credentials are in demand.”

A gut reaction

Similarly, the growing interest in gut health is leading more processors to incorporate probiotics in such products as yogurt, kefir, and other fermented dairy offerings, says Jerry Powell, senior sales director for Corbion, a Lenexa, Kan.-based ingredient supplier. Probiotics are living microorganisms that provide health benefits when eaten.

“Plant-based ingredients, including almond, oat, and soy extracts, also are on the rise as consumers seek alternatives to traditional dairy, which is driven by concerns around health, sustainability, and ethical considerations,” he states.

In addition, emulsifiers are “getting more scrutiny as consumers look for ingredients that align with their ‘natural’ aspirations,” says Regina Draper, research and development category manager for dairy and dairy alternatives for Cargill Inc., a Wayzata, Minn.-based ingredient developer.

This includes the greater interest in replacing emulsifiers that contain fatty acids like diglycerides and monoglycerides with plant-based lecithin in the ice cream space, she states. Draper notes that lecithin can hold the fat and water portions of a frozen dessert system in place and contribute to the perception of a creamier mouthfeel.

Protein fortifiers — like whey protein, casein, and plant-based proteins — are becoming more common too as interest in high-protein diets continues to expand, Powell suggests. 

Sweet on stevia

With sugar cutbacks a priority for many shoppers, there also is more interest in stevia, a plant-based sweetener that is hundreds of times sweeter than sugar and has no calories or carbohydrates. “Stevia is enabling sugar reduction without the use of artificial sweeteners,” Draper says. “This is especially true in the yogurt space, a segment where consumers are more attuned to label considerations.”

This consumer shift to healthier and more natural products is resulting in fewer requests for artificial sweeteners and synthetic flavors, Powell says. “Preservatives such as sodium benzoate and potassium sorbate, which operators traditionally use to extend dairy product shelf life, are also falling out of favor, particularly with the growing demand for clean-label products. Consumers are increasingly wary of ingredients that sound overly processed or chemical.”

A focus on cleaner labels is occurring as additional shoppers resist products that consist of artificial and less-recognizable ingredients, Draper says.

“Consumers assume the ingredient statements for dairy products will be short, simple, and understandable,” notes Mark Fahlin, Cargill category marketing manager for health and nutrition, and dairy. “Products that shoppers perceive as healthier often carry higher label expectations and that is certainly true in the dairy space.” 

Cargill research reveals that consumers are more likely to check labels for such selections as yogurt and plant-based milks than for categories like soft drinks and cookies.

Dairy ingredients that are becoming increasingly prevalent differ by product type, Powell states. Such functional elements as probiotics and prebiotics, including natural fibers like inulin, are having a greater presence in yogurt and fermented selections, he notes, while plant-based alternatives are more prominent in milk, along with lactose-free and fortified options that cater to various dietary preferences and health concerns.

More ice cream selections, meanwhile, are low in sugar with keto-friendly ingredients, and additional processors are incorporating natural sweeteners and colorants as shoppers seek healthier indulgence options, Powell states.

While label considerations and nutritional profiles are less of a priority for consumers who primarily favor indulgence, “there is a place for ice creams that lean more toward ‘permissible indulgences,’” Fahlin states. “They might be lower in sugar and higher in protein, or reflect clean-label trends with a short, simple ingredient statement.”

Though health and wellness are key factors in shopper purchasing decisions, it is vital that processors and brands also focus on taste and value when developing and marketing selections, he says. “If a product doesn’t taste great, consumers will not repeat purchase,” Fahlin notes, adding that “brands are under tremendous pressure to deliver value, but that doesn’t always mean lowest cost” and could include such elements as nutritional benefits.

Opportunities await

Moving forward, processors can further boost activity by incorporating ingredients that help support weight management, says Denisse Colindres, BENEO senior manager, nutrition communication, Americas. “When food intake is limited, the foods that are consumed should deliver appropriate amounts of macronutrients,” she states.

Processors also will likely place even greater emphasis on functional ingredients that offer health benefits, Powell predicts. “Consumers will increasingly seek out dairy products that support digestive wellness and energy management,” he says.

As demand for dairy ingredients increases, more suppliers will invest in manufacturing capacity and technology to improve productivity and product quality, leading to a favorable dairy ingredients market outlook, IMARC states.

In addition, there will be an increase in research and development activities as developers seek innovative solutions using dairy ingredients, states Pune, India-based Allied Market Research. “Recent developments in advanced technologies, such as adsorption chromatography, have been found to produce ingredients with prebiotic benefits, thus presenting a major opportunity for market growth,” Allied notes.

Sustainability will play a bigger role in ingredient selection too, with more processors opting for elements with a lower environmental footprint, Powell states, adding that the clean-label movement will evolve as well. “There will be a push for even simpler ingredient lists that feature natural components without sacrificing the quality and performance of the final product,” he notes.