Got Milk? Get Cultured

From flavored to functional, everybody’s doin’ dairy, and it’s never been more fun! Indulgent caramel cream and cheesecake yogurts, fun-flavored milks that fizz when you shake them, and herb, spice, and fruit–laden squeezable cream cheese and sour cream are among a colorful new pasture of dairy products, packages, and tastes.

There’s yogurt for non–yogurt lovers, carbonated milks for sports replenishment, and sliceable mixed bricks of crumbled feta and smooth Cheddar cheese! Eye-catching little bottles, single-serve cottage cheese and salsa cream, and red pepper dips-to-go have catapulted dairy to unprecedented convenience store, vending, and sports-arena sales. Even school milk cartons sport playful characters and colorful designs.

Cultured dairy products—yogurt, sour cream, cottage cheese, and dips—are enjoying immense popularity (see table). IRI reports that for the year ending May 20, 2001, the “Top 10” yogurt vendor’s sales jumped 9.4% and volume 4.6%. And in 2001, almost everything yogurt is selling. While IRI and ACNeilsen growth rates appear lower—as they no longer include Wal-Mart’s scanner data—sour cream was still up 3.4%, yogurt 3.4% and flavored milk 7.4%, as of June 24, 2001.

While low-fat still dominates yogurt sales at $1.2 billion (up 9.6%), followed by non-fat at $746 million (up 3.4%), ACNeilsen as of May 31, 2001, reports that whole-milk varieties are coming on strong at $201 million (up 62.3%). Full-fat ($428 million, up 5.5%) tops the sour cream category. Not surprisingly, marketers like Old Home Foods, St. Paul, Minn., are offering more luscious whole-milk options like Velvet Delight, in apple pie and orange cream flavors, with 230–240 kcal and 7 g of fat.

Driven by health, creative convenience, and flavor, the $2.9-billion yogurt category is alive with creativity. Health-oriented companies like Stonyfield Farms—now 40% owned by Danone—offer Yo-Self™ fortified yogurt for women, Yo-Baby ™ for children/infants, and even O’Soy™ yogurt for those seeking a nondairy alternative. Squeezable yogurts like Yoplait’s Expresse™ continue to enjoy strong sales, and Minneapolis-based Marigold Foods’ new Spoonz yogurt with an edible cookie spoon for kids won’t be far behind.

And if international trends are any indication, get set for more. Germany’s Ehrmann AG offers kids crackling yogurts with Pop Rocks in cola and bubble gum flavors. Japan’s Morinaga Milk Industry Co.’s cranberry yogurt is touting a reduction in breast cancer. Switzerland’s Emmi 4plus yogurt balances energy, protein, fat, carbohydrates, vitamins, minerals, fiber, and beneficial bacteria.

Fluid-milk sales have simply chugged along in the past few years—although branded and organic milks are making some impressive gains—but flavored milks and other highly creative dairy-based drinks are capturing new markets nationwide. Nestlé has led a resurgence in flavored milk with NesQuick in attractively shaped PET bottles with full overwraps, along with Land O’Lakes’ Grip ’n Go. Seattle’s WestFarm Foods offers single-serve DairiGo in Maximum Chocolate and Great White flavors, with a shark on the label. Minneapolis’ American Dairy Corp. offers Deja Moo™ and Bravo! Foods’ Looney Tunes™ flavored single-serve milk, with an eye toward C-stores and super centers.

And the future looks bright. Northbrook, Ill.–based Egg Cream America introduced Coffee Dream, the country’s first dairy-based carbonated coffee beverage. General Nutrition Centers are opening nutritious smoothie bars. In Europe, Toni is a clever Swiss Muesli breakfast yogurt drink with added fruit, wheat flakes, and rolled oats, along with a good dose of vitamins B-2 and B-12 in a grab-and-go bottle. And Old Home Foods’ Shakers are single-serve yogurt shakes, with whey protein concentrate, that get foamy and frothy when shaken. Mac Farms, Inc.’s RPM is the first milk drink in the fluid-replacement beverage category, enhanced with potassium, magnesium, and some carbonation. Canastoga, N.Y.-based Queensboro Farms’ E-Moo is another nonfat-milk carbonated beverage designed to appeal to kids. The company’s PERQ beverage is nutrition tailored to women. Queensboro also offers a PERQ-T designed for elderly Americans.

There is no doubt that dairies are in a unique position to capture other refrigerated beverage markets such as teas, as they have all the tools in place—pasteurizer, filler, case packer, and distribution. And look at the diversity of dairy look-a-likes, too. If imitation is one of the greatest forms of flattery, dairy marketers are doing a very good job!

by A. ELIZABETH SLOAN
Contributing Editor
President, Sloan Trends & Solutions, Inc.
Escondido, Calif.