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DAIRY PRODUCT
TRENDS
AND INNOVATION
Southern Dairy Conference
March 8, 2016
Cheryl Hayn
Checkoff Builds Demand for Dairy Products
Western Dairy
Center
• University of
Minnesota
• South Dakota
State University
•...
Agenda
Ø Macro U.S. Demographic and Societal Forces Driving Trends
Ø Consumer Trends
Ø Dairy Trends and Innovation
o Mi...
MACRO DRIVERS OF TRENDS
Changing Demographics and Family Dynamics
Increased U.S. diversity
By 2030…
•  20% over age 65
•  22% Hispanic
•  13% Afri...
use	
  smartphones	
  to	
  
decide	
  whether	
  to	
  
visit	
  businesses	
  
Technology Explosion: Altered Paths to Pu...
Innovation: Demand for New Ideas on the Rise
Three in four Americans
Feel Innovation is ‘an easier/faster way of doing som...
Instant Gratification
We are connected
24/7
Feel ‘it is important to be
reachable wherever I am’.
2 in 3
Americans
Implica...
Resources and Sustainability
As consumers face scarcities of resources
and increasing cost pressures,
68% of Americans exp...
A FEW CONSUMER TRENDS
Consumers’ Fascination with Food Is Growing
They value the food experience and want the world to know
Focus on Health & Well-Being
My most recent restaurant
meal was healthy.
It’s important to feel
good about the foods
and b...
Natural and Transparent Brands Win Consumers
68%	
  
Socially	
  
Responsible	
  
71%	
  
Environmentall
y	
  
Responsible...
Protein Continues to Grow in Importance
54% Adults seeking
more protein in their diet1
69% Adults prefer to add protein
fr...
Free-From Foods Gaining Presence
FREE-FROM FOODS GAINING PRESENCE
GROWTH IN CLAIMS
gluten free
no allergens
sugar free
gmo...
DAIRY TRENDS AND INNOVATION
--- MILK
+27% IN SERVINGS
AT QUICK SERVE RESTAURANTS
(2010-14)
Milk Growing in Non-Traditional Ways
+58% IN OCCASIONS
AT HOME & AWA...
Milk has Growth Areas at Retail With Opportunity to
Further Leverage
When additional benefits are
incorporated into milk, ...
Added Value Milk
•  Higher
protein
•  Less sugar
•  Lower
calories
•  Lactose-free
Tea Lattes Inspired by Coffeehouses
Celestial Lattes
•  Dirty Chai –chai spiked with espresso
•  The Godfather –chai with ...
QSR Chains Are Featuring Tea Lattes – Hot & Frozen
Chocolate Tea Latte
Tea combined with our Special
Dutch™ chocolate powd...
QSR Chains Are Adding RTD Iced Coffee Beverages
•  Mocha, vanilla and caramel
•  10-ounce or 32-ounce plastic bottles
22
S...
Indulgently Flavored Milk
23
Prairie Farms
•  Chef-inspired
flavors
•  Dark Chocolate
Truffle
•  Sea Salt
Caramel
•  Vanil...
QSR Chains Feature Indulgent Lattes
24
Campfire Mocha
Cooler
Chocolate &
Marshmallow Choco Loco
Cookies ‘N Crème
Mint Choc...
Innovative Milk Products Across the Globe
Japan
•  Fragranced
milk for scent-
sensitive
consumers
•  Subtle aroma
of apple...
DAIRY TRENDS AND INNOVATION
--- YOGURT
26
27
Source: USDA NASS
4,757
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
198
199
199
199
199
199
199
199
199
199
199
...
0.2
3.5
6.3
7.3
11.4
14.9
15.0
15.8
18.3
18.3
18.7
23.8
23.8
26.2
27.1
28.6
29.5
36.3
38.1
44.0
46.4
47.3
48.4
51.0
57.4
6...
Greek Still Expanding – Now 36% Category
3,171 mil
pints
3,199 mil
pints
3,367 mil
pints
3,337 mil
pints
3,239 mil
pints
T...
QSRs Are Now Offering Greek Yogurt
• Starbucks Offers 3 Greek Yogurt Parfaits
30
Dark Sweet
Cherry Fresh Berries & Honey
S...
Greek Yogurt Adds Seeds/Grains
Yoplait Plenti
•  Oats, flax and
pumpkin seeds
31
Chobani Greek
Yogurt Oats
•  Up to 10 gra...
Chobani Adds Chocolate Added to New Yogurt
32
Vanilla Yogurt with Honey Roasted
Nuts, Peanut Butter Clusters and Milk
Choc...
Greek Yogurt Incorporated Into Other Foods
33
Yogurt with Vegetables Found Around the World
Australia
Yummia Yogurt
•  Layered yogurts with fruit and
vegetable pieces a...
Yogurt with Innovative Flavors
35
Stonyfield Farm
•  Gingered Pear
Canada: President’s
Choice
•  Drinkable caramel coffee
...
DAIRY TRENDS AND INNOVATION
--- CHEESE
36
Per Capita Cheese Consumption has Nearly Tripled
Since 1970
37
33.7
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
1970
1971
1...
Source: IRI DMI Custom Cheese Database,
Total U.S. Multi-Outlet + Conv.
57.8
55.6
53.8
53.6
52.2
46.5
46.1
45.9
43.4
42.8
...
New Forms of Snacking Cheese
U.S.
Burnett
Dairy:
Spaghetti-
style
format of
low-
moisture
part-skim
mozzarella
U.S.: Mr. C...
Snacking Cheeses Packaged In Side-by-Side Containers
Borden
•  GOOD2GETHER snack trays
combine real, natural cheese and
cr...
Snacking Cheeses Found at Starbucks
Cheese & Fruit Bistro Box
Creamy Brie, bold Gouda,
two year‐aged Cheddar
Protein Bistr...
Retail Cheeses Get Fiery!
Japan Introduced a Cheese To Improve Liver Function
after Beer Drinking
• Cheese snack that helps
liver function recovery ...
In Summary
• Consumers are constantly looking for new and different
• How can we tap into technology trends?
• Make dairy ...
Asian Food Regulation Information Service is a resource for the
food industry. We have the largest database of Asian food
...
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Dairy Product Trends and Innovation in 2016

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Presentation from 42nd Annual Southern Dairy Conference, held in Atlanta, Georgia between 8 ~ 9 March 2016.

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Dairy Product Trends and Innovation in 2016

  1. 1. DAIRY PRODUCT TRENDS AND INNOVATION Southern Dairy Conference March 8, 2016 Cheryl Hayn
  2. 2. Checkoff Builds Demand for Dairy Products Western Dairy Center • University of Minnesota • South Dakota State University • Iowa State University Wisconsin Center for Dairy Research Southeast Dairy Foods Research Center Northeast Dairy Foods Research Center Midwest Dairy Food Research Center • University of Wisconsin Madison • Cornell University • North Carolina State University • Mississippi State University • California Polytechnic State University • Utah State University California Dairy Research Center Fluid Milk Yogurt/ Cultured Dairy Products Other Dry Ingredients Whey Ingredients Milk Protein Ingredients Cheese •  Six Leading Edge Scientific Dairy Research Centers Offer Comprehensive Support •  Number of research projects in the pipeline •  SEDRC headed up by Dr. Mary Ann Drake
  3. 3. Agenda Ø Macro U.S. Demographic and Societal Forces Driving Trends Ø Consumer Trends Ø Dairy Trends and Innovation o Milk and Dairy Beverages o Yogurt o Cheese
  4. 4. MACRO DRIVERS OF TRENDS
  5. 5. Changing Demographics and Family Dynamics Increased U.S. diversity By 2030… •  20% over age 65 •  22% Hispanic •  13% African American •  10% Asian/Other Race •  16% Foreign-born Single parent Mom as breadwinner Blended families More households are:
  6. 6. use  smartphones  to   decide  whether  to   visit  businesses   Technology Explosion: Altered Paths to Purchase own  a   smartphone   64% say  mobile  payment   is  highly  important   for  restaurants   30% of  shoppers’  journeys   start  online   67% 21% Source:  Pew  Research  Ins1tute,  Technomic  Consumer  Restaurant  Brand  Metrics     6
  7. 7. Innovation: Demand for New Ideas on the Rise Three in four Americans Feel Innovation is ‘an easier/faster way of doing something’ YET, consumers feel new developments are going too fast •  Testing isn’t adequate •  54% consumers say greed/money is the real motivator behind the innovation Implications: Opportunities abound within dairy as consumers become more and more open to experimentation (taste/ flavors, packaging, usage, etc.) Yet, it’s important to convey to consumers “shared values”
  8. 8. Instant Gratification We are connected 24/7 Feel ‘it is important to be reachable wherever I am’. 2 in 3 Americans Implications: •  From a product standpoint, think about dairy availability everywhere •  24/7 access is imperative. Be equipped to give the information they seek or need at all times.
  9. 9. Resources and Sustainability As consumers face scarcities of resources and increasing cost pressures, 68% of Americans expect “brands and companies to be environmentally responsible these days”. Implications: •  Be transparent – ethical and environmental credentials are increasingly being scrutinized by consumers.
  10. 10. A FEW CONSUMER TRENDS
  11. 11. Consumers’ Fascination with Food Is Growing They value the food experience and want the world to know
  12. 12. Focus on Health & Well-Being My most recent restaurant meal was healthy. It’s important to feel good about the foods and beverages I put into my body. 54%   60%   2012   2014   of  consumers  agree   65%   Source:  Technomic  Consumer  Trend  Report  Series,  2015     1 2
  13. 13. Natural and Transparent Brands Win Consumers 68%   Socially   Responsible   71%   Environmentall y   Responsible   84%   Product   Transparency   65%   Locally  Made   78%   Natural   78%   Brand  I’ve   Always  Used   How important is it that the retail brands you buy are. . . Source:  Technomic  Food  with  a  Story,  2015    
  14. 14. Protein Continues to Grow in Importance 54% Adults seeking more protein in their diet1 69% Adults prefer to add protein from foods that have it naturally1 25% Adults look for protein on Nutrition Facts label2 1 Hartman Health & Wellness 2015 2 NMI 2014 ü Muscle ü Energy ü Weight
  15. 15. Free-From Foods Gaining Presence FREE-FROM FOODS GAINING PRESENCE GROWTH IN CLAIMS gluten free no allergens sugar free gmo free +101% +43% 29% +17% dairy free +16% no additives +9% fructose free +3% Source: Innova
  16. 16. DAIRY TRENDS AND INNOVATION --- MILK
  17. 17. +27% IN SERVINGS AT QUICK SERVE RESTAURANTS (2010-14) Milk Growing in Non-Traditional Ways +58% IN OCCASIONS AT HOME & AWAY (2010-14) +17% IN DOLLARS IN EACH OF LAST 3 YEARS AT RETAIL READY-TO-DRINK SPECIALTY COFFEES
  18. 18. Milk has Growth Areas at Retail With Opportunity to Further Leverage When additional benefits are incorporated into milk, sales grow “VALUE-ADDED” MILKS GREW 20% OVER LAST 3 YEARS Source: IRI custom DMI milk database; milk concept tests Lactose-Free Protein Glass Refuel Non-Homogenized Grass-fed Organic Omega
  19. 19. Added Value Milk •  Higher protein •  Less sugar •  Lower calories •  Lactose-free
  20. 20. Tea Lattes Inspired by Coffeehouses Celestial Lattes •  Dirty Chai –chai spiked with espresso •  The Godfather –chai with espresso and cocoa •  Mountain Chai –chai with ginger, cardamom and cloves •  Matcha Green – matcha green tea powder 20 Argo Tea •  Chai •  Earl Grey Vanilla Crème •  Green Tea Strawberry Crème
  21. 21. QSR Chains Are Featuring Tea Lattes – Hot & Frozen Chocolate Tea Latte Tea combined with our Special Dutch™ chocolate powder, steamed non-fat milk and foam Frozen Spiced Chai Spiced Chai Is Mixed With Milk, Ice Then Blended Smooth, and Topped with Whip Cream
  22. 22. QSR Chains Are Adding RTD Iced Coffee Beverages •  Mocha, vanilla and caramel •  10-ounce or 32-ounce plastic bottles 22 Similar to Starbucks RTD Iced Coffee Beverages
  23. 23. Indulgently Flavored Milk 23 Prairie Farms •  Chef-inspired flavors •  Dark Chocolate Truffle •  Sea Salt Caramel •  Vanilla Chai Latte Promise Land •  Mint Chocolate Chip
  24. 24. QSR Chains Feature Indulgent Lattes 24 Campfire Mocha Cooler Chocolate & Marshmallow Choco Loco Cookies ‘N Crème Mint Chocolate Bomb
  25. 25. Innovative Milk Products Across the Globe Japan •  Fragranced milk for scent- sensitive consumers •  Subtle aroma of apple or peach but without the taste of either Singapore •  Cereal and milk in one beverage 25
  26. 26. DAIRY TRENDS AND INNOVATION --- YOGURT 26
  27. 27. 27 Source: USDA NASS 4,757 0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 198 199 199 199 199 199 199 199 199 199 199 200 200 200 200 200 200 200 200 200 200 201 2011 201 201 201 U.S. Yogurt Production (Million Lbs.) USDA  NASS  Yogurt  Produc@on   2015  YTD  :  +3.2%  vs.  YA   Long-Term Growth in Yogurt Production
  28. 28. 0.2 3.5 6.3 7.3 11.4 14.9 15.0 15.8 18.3 18.3 18.7 23.8 23.8 26.2 27.1 28.6 29.5 36.3 38.1 44.0 46.4 47.3 48.4 51.0 57.4 62.7 India South Africa Japan China Russia United States Mexico Taiwan Australia New Zealand Greece Norway Czech Republic Ireland Germany Turkey Switzerland France Denmark Portugal Austria Sweden Saudi Arabia Finland Netherlands United Arab Emirates 24.2 12.1 9.0 4.0 Europe Tot Americas Africa & Middle East Asia-Pacific U.S. Yogurt Market has Room to Grow Relative to Other Countries Source: Datamonitor Database Annual Per Capita Consumption (lbs) 2014 Average per person yogurt consumption is 14.9 lbs in U.S. 28
  29. 29. Greek Still Expanding – Now 36% Category 3,171 mil pints 3,199 mil pints 3,367 mil pints 3,337 mil pints 3,239 mil pints TOTAL YOGURT GREEK YOGURT 183 mil pints 738 mil pints 429 mil pints 1,081 mil pints 1,190 mil pints RETAIL YOGURT MARKET 2010 2011 2012 2013 2014
  30. 30. QSRs Are Now Offering Greek Yogurt • Starbucks Offers 3 Greek Yogurt Parfaits 30 Dark Sweet Cherry Fresh Berries & Honey Strawberry
  31. 31. Greek Yogurt Adds Seeds/Grains Yoplait Plenti •  Oats, flax and pumpkin seeds 31 Chobani Greek Yogurt Oats •  Up to 10 grams whole grains •  New flavors added in Aug 2015 Powerful Yogurt •  Fruits, grains and seeds •  Targets males Stonyfield Farms Super Seeds •  Softened Flax Seeds
  32. 32. Chobani Adds Chocolate Added to New Yogurt 32 Vanilla Yogurt with Honey Roasted Nuts, Peanut Butter Clusters and Milk Chocolate Chunks Coffee Yogurt with Biscotti Pieces and Chocolate
  33. 33. Greek Yogurt Incorporated Into Other Foods 33
  34. 34. Yogurt with Vegetables Found Around the World Australia Yummia Yogurt •  Layered yogurts with fruit and vegetable pieces at the bottom •  Carrots, Beetroot and Sweet Potato 34 U.S.: Stonyfield Farm •  Kids’ yogurt with vegetables •  Beets and Spinach
  35. 35. Yogurt with Innovative Flavors 35 Stonyfield Farm •  Gingered Pear Canada: President’s Choice •  Drinkable caramel coffee yogurt shots Chobani •  Pumpkin Spice •  Plum (limited edition)
  36. 36. DAIRY TRENDS AND INNOVATION --- CHEESE 36
  37. 37. Per Capita Cheese Consumption has Nearly Tripled Since 1970 37 33.7 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total Cheese – Per Capita Consumption (Lbs.) Source: USDA NASS 2013 data is preliminary. 11.4
  38. 38. Source: IRI DMI Custom Cheese Database, Total U.S. Multi-Outlet + Conv. 57.8 55.6 53.8 53.6 52.2 46.5 46.1 45.9 43.4 42.8 42.3 39.9 39.0 37.7 36.6 35.9 35.3 33.7 33.3 26.7 France Iceland Luxembourg Germany Finland Switzerland Italy Estonia Sweden Netherlands Austria Cyprus Norway Israel Czech Republic Lithuania Latvia Belgium United States Canada 26.0 25.4 25.1 24.7 24.7 22.3 21.2 21.2 20.7 20.5 17.9 15.9 14.8 14.8 14.6 13.2 10.4 9.3 7.9 6.8 Australia Hungary Poland Argentina United Kingdom Slovakia Portugal Croatia Egypt Spain Chile Turkey Ireland New Zealand Russia Uruguay Iran Ukraine Brazil Mexico Cheese  Per  Capita  ConsumpRon  by  Country  (Lbs.)  –  2012   Asian countries such as China and Japan are listed at under 5 pounds of cheese per capita. Room to Grow U.S. Per Capita Cheese Consumption Room to grow
  39. 39. New Forms of Snacking Cheese U.S. Burnett Dairy: Spaghetti- style format of low- moisture part-skim mozzarella U.S.: Mr. Cheese O’s •  Crunchy on-the-go real cheese snack •  Four flavors
  40. 40. Snacking Cheeses Packaged In Side-by-Side Containers Borden •  GOOD2GETHER snack trays combine real, natural cheese and crunchy mini-twist pretzels Sargento •  Pairs cheese with roasted nuts and dried fruits
  41. 41. Snacking Cheeses Found at Starbucks Cheese & Fruit Bistro Box Creamy Brie, bold Gouda, two year‐aged Cheddar Protein Bistro Box White Cheddar cheese Pinwheels Bistro Box Prosciutto and mozzarella are swirled together
  42. 42. Retail Cheeses Get Fiery!
  43. 43. Japan Introduced a Cheese To Improve Liver Function after Beer Drinking • Cheese snack that helps liver function recovery after drinking alcohol, specifically beer • Two flavors — ginger and soy sauce • Enhanced with the amino acid ornithine
  44. 44. In Summary • Consumers are constantly looking for new and different • How can we tap into technology trends? • Make dairy beautiful and easy at mealtime • Value-added milk products are getting the attention of consumers • Transparency, food safety key • We all must tell the farm story • But best told by dairy farmers themselves
  45. 45. Asian Food Regulation Information Service is a resource for the food industry. We have the largest database of Asian food regulations in the world – and it’s FREE to use. We publish a range of communication services (free and paid), list a very large number of food events and online educational webinars and continue to grow our Digital Library. Feel free to contact us anytime to talk about your specific requirements, offer comments, complaints or to compliment us. We look forward to hearing from you soon! www.asianfoodreg.com adrienna@asianfoodreg.com

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