Dairy

Reinvigorating the Dairy Sector in 2024

Introduction

Despite the growing emphasis on changing dietary patterns, a significant proportion of consumers continue to incorporate dairy products into their diets. This particularly applies to those following a flexitarian approach who show less reluctance to avoid dairy compared to meat. Furthermore, consumers view dairy as a contributor to an overall balanced diet due to its association with essential nutrients such as protein, calcium, and various vitamins and minerals.

While the consumption of fresh milk has decreased over the past few decades, with many opting for alternative functional beverages, it remains a staple ingredient in hot drinks. Although the plant-based milk sector has seen substantial growth, it still remains behind the dairy market, with many consumers willing to switch between dairy and plant-based options based on the occasion. Additionally, dairy products, such as yogurt, are popular choices for snacking, with many individuals regarding them as a better-for-you, guilt-free alternative to items like chocolate and confectionery.

Consumers are Cutting Back on Non-Essentials

Overall, consumers say that their dairy consumption habits have remained consistent over the past few years, emphasizing the significance of dairy in their diets and indicating a reluctance to decrease consumption due to health or financial considerations, particularly amidst rising prices.

The exception to this pattern can be seen through the decline in consumption of ice cream. For instance, FMCG Gurus’ consumer insights indicate that where nearly three in ten consumers express a desire to reduce their intake, reflecting a trend of cutting back on indulgent and perceived non-essential, less healthy products during times of financial uncertainty, although the ability to do so may not fully align with attitudes.

While some consumers are increasing their consumption of soy and fresh milk in pursuit of healthier and more sustainable options, a notable portion has actively sought to reduce their intake, signaling more challenging conditions for the plant-based market compared to a few years ago. 

Consumers are Likely to Check Nutritional Labeling in ‘Better-For-You’ Product Categories

Consumers show an interest in nutritional information when choosing dairy products, with ingredient integrity significantly influencing their perceptions of value as they navigate through altering purchasing habits to manage escalating prices while aiming to minimize sacrifices.

Notably, consumers are most inclined to check nutritional labels when purchasing fresh milk products. For example, FMCG Gurus’ market research reveals that 64% of consumers who purchase such products say they regularly check nutritional labeling in the fresh milk category. This underscores a widespread focus on nutritional content in categories perceived as healthier while showing less attention in categories linked to indulgence. Furthermore, within the milk category, consumers are inclined to check nutritional labels to assess product freshness, particularly for perishable items. This highlights the need for product information to be easily accessible and transparent, enabling consumers to make more informed decisions about a product's nutritional profile within seconds.

Purity and Freshness Come Hand in Hand

Perceptions of quality, safety, and value within the dairy industry are significantly influenced by freshness, reflecting consumers' more attentive approach to spending and their heightened scrutiny regarding the best value for their money. Freshness is commonly associated with naturalness and products free from additives, concepts that have witnessed a notable increase in consumer recognition between 2021 and 2023. For instance, FMCG Gurus’ consumer insights show that 71% of consumers felt that natural claims shaped perceptions of whether a product is genuinely fresh in 2023. In comparison, only 43% of global consumers felt this way in 2021.

This shift post-pandemic suggests a decreased emphasis on product story and origin, with consumers prioritizing health and purity over concerns about supply chains. It underscores a consumer preference for authentic ingredients that are perceived as beneficial for overall well-being and the environment. 

This article is based on FMCG Gurus: Reinvigoration of Dairy in 2024 – Global Report. For more information, please click here.

Milk Trends: Health and Naturalness

Introduction

Milk trends have evolved to meet changing consumer preferences and health-conscious lifestyles. Since the COVID-19 pandemic, a large proportion of consumers have become more attentive to their health and wellness. As a result, many consumers adopted more mindful shopping habits, with a focus on ingredient lists and nutritional labeling. This approach has led to a growing demand for consumers following vegan or plant-based diets. For instance, dairy-free alternatives such as almond milk, soy milk, and oat milk have become more popular in recent years. FMCG Gurus’ consumer insights reveal that 30% of global respondents consume oat milk on a daily or weekly basis.

While these kinds of milk are on the rise, it is important to note that fresh milk still stands as the most popular type of milk. Despite this, some consumers are taking a proactive approach to their health and sustainability by seeking out more organic and natural milk.

Dairy and Plant-Based Milk Alternatives

Plant-based milk alternatives are gaining popularity in the milk industry. For example, FMCG Gurus’ market research highlights a 9-12% increase in consumers drinking plant-based alternative milk at least weekly since 2017. Almond milk has seen the highest increase since 2017. This illustrates a growing proportion of consumers who are following a diet that involves an avoidance or moderation of animal products. Many consumers are opting for these options due to health, environmental, and ethical concerns.

However, our findings show that fresh milk has seen a 29% increase since 2017. This demonstrates that fresh milk dominates the milk market. It is important to highlight that the increased consumption of fresh milk may have been influenced by people staying at home in 2021 due to the pandemic. As a result, people will have been eating breakfast cereal more frequently, as well as scratch cooking and baking. In addition, dairy milk has been a traditional staple for many years, due to its taste, nutritional value, and familiarity to consumers.

Ensure Naturalness

With more emphasis on health and ingredients, consumers deem authenticity and naturalness important product attributes in the milk market. For instance, FMCG Gurus’ consumer insights demonstrate 74% of global consumers find purity claims important in the fresh milk category. This illustrates that consumers are avoiding and moderating ingredients deemed unnatural or artificial. These kinds of ingredients are associated with being detrimental to health and the environment. As a result, brands in the milk market should position products around clean labels and provide streamlined ingredient lists to enhance notions of naturalness.

In addition, naturalness is associated with higher quality and premium. This is particularly important during today’s cost of living crisis in which consumers are seeking out products they deem good value for money.

Promote Nutritional Labeling and Functional Ingredients

Nutritional labeling and functional ingredients have captured the attention of many consumers in recent years. FMCG Gurus’ market research reveals that 62% of global consumers check the nutritional labeling of Kefir or probiotic milk most or all of the time. This illustrates a focus on the functional, health-boosting benefits of milk. Some of the benefits of Kefir milk include improving cholesterol, blood sugar control, and gut health. Our findings demonstrate an increased demand for ‘good for you’ products to aid consumers’ long-term health and wellness.

Moreover, consumers prioritize checking for sugar and protein content when checking nutritional labeling. Our consumer insights highlight of consumers who check for nutritional labeling in the oat milk category, 65% check for sugar content, followed by 64% who look for protein content. This demonstrates how consumers are moderating their sugar intake to avoid health complications. Also, protein is a priority for consumers in the oat milk category. This suggests that consumers are increasing their intake of protein in their diet, due to nutritional benefits. As a result, brands should promote functional ingredients and nutritional value in milk products, without compromising on taste and sensory appeal.

The article is based on FMCG Gurus: Milk Trends – Global Report 2023. For more information, please click here.