Dairy mimicry: “Consumers want better variety and improved innovation,” say suppliers

02 Aug 2023 --- Category opportunities in alt-dairy are increasing with consumers demanding more variety, while also seeking solutions that balance taste, texture, nutrition and sustainability. Formulating plant-based options for yogurt, cheese, beverages and other applications takes both ingredient and processing know-how, according to key dairy ingredient suppliers.

Food Ingredients First speaks with experts from International Flavors & Fragrances (IFF), Ingredion, Corbion and AB Biotics, who share insights into the evolving space of dairy and non-dairy applications.

Trend drivers
Using its trend-driven innovation tools, IFF has identified three overarching trends in the dairy space.

“First, we have Omnipresent Health & Well-being,” says Rogerio de Almeida Prado, an innovation marketing leader at IFF. “Dairy, in general, is often associated with health and wellness – especially milk and yogurt. We now see a repositioning of dairy to highlight products as protein-forward options. Ultimately, this will allow dairy to compete against products from other categories such as protein bars, high-protein-claimed bakery products and snacks products.”

Fermented dairy products are positioned to attract health-conscious consumers.High protein in new product launches has been a growing claim in categories that are not typically identified as protein-forward, notes Prado. “Still, while health is at the forefront of dairy positioning, we also see a growing emphasis on another trend we call ‘Amplified Experiences’.”

Despite wanting lower sugar, fat and calories, Prado explains that consumers still want to feel that dairy products are indulgent. “This trend encompasses taste, texture, color and additions, which all contribute to indulgence. An example of a combination of these first two trends is the rise in frozen yogurt consumption.”

Lastly and unsurprisingly, IFF has identified “Affordable Nutrition” as a major trend in dairy. “This is a global trend with a stronger presence in Greater Asia, Latin America and Africa. In Latin America, for example, IFF created milk for kids on the go that is pasteurized, fermented, lactose-free, has 6 g of protein and has a longer shelf life,” Prado comments.

“Parents prefer this type of product because it has all the nutrition their children need but it does not need to be refrigerated.”

In line with Innova Market Insights’ fourth Top Ten Trend for 2023, “Plant-based: Unlocking a new narrative,” the non-dairy category has markedly expanded to wider, more mainstream applications.

At the recent IFT FIRST trade show, which took place in Chicago, US, last month, creamy, rich vegan alternatives to cream cheeses, ice cream and custards were prevalent, evidencing the demand for plant-based concepts on a global scale.

“Plant-based dairy continues to be a thriving category in the market,” notes Brittany VanBuskirk, senior associate, plant-based protein applications lead at Ingredion. “Product expectations are rising and consumers will no longer simply accept dairy mimicry; they’re looking for better variety and improved innovation.”

According to Innova Market Insights, pea protein (isolate, concentrate) accounts for 54% of the launches that contain plant-based protein in the dairy alternative space, followed by fava bean with 11% and potato and rice with 8% each, respectively, VanBuskirk tells us.

Drew Wunderly, senior scientist for dairy at Corbion, says the company is witnessing a few notable trends and blurring categories that are driving growth.

“Dairy beverages are a growing space as consumers are becoming more health-conscious and looking for more on-the-go options for their busy lifestyles. Both cultured dairy products supporting gut health and high protein products, in the form of drinkable yogurts, flavored milks, and shakes, are specific types of beverages gaining traction to promote wellness.”

Category performance
Meanwhile, Matt Yurgec, business scientist and manager, dairy and plant-protein applications team at Ingredion, says that the coffee creamer and the Ready to Drink (RTD) category has seen significant growth, both plant-based and dairy-based.

“Plant-based creamers have taken off in recent years as well as barista style milks, such as those used to make lattes and frappes at coffee hot spots. However, providing the texture, stability and whitening of the coffee with plant-based options is a challenge that continues to be explored,” he notes.

“Higher protein options for plant-based dairy across the market are needed while also having good performance, especially in areas such as yogurt and milks. Plant-based cheese is an area where a significant improvement in product performance, from a texture perspective, can ignite a boom in that category.”

Sergi Audivert, co-founder and executive director at AB-Biotics, flags that fermented dairy products such as yogurt, sour cream and kefir are rising in popularity, “driven by growing consumer attention around digestive health and the presence of biotics in these products.”Despite wanting lower sugar, fat and calories, consumers also dairy products that are indulgent.

“Consumers tend to favor functional food and drink products over nutritional supplements, which grants fermented dairy products the unique status of a natural, familiar food with health benefits associated with probiotic supplements,” he says.

“Harnessing the power of probiotics, fermented dairy foods deliver a range of beneficial bacteria to the gut and diversify the composition of it. Certain probiotic strains found in yogurts have been linked to reduced gastrointestinal issues, improved immune response and more.”

“We’re seeing fermented dairy products which are positioned to attract health-conscious consumers grow, and we predict this will grow in parallel with the success that biotic solutions are experiencing in the health and nutrition space,” adds Audivert.

“Share of stomach”
IFF’s Prado says there is room for dairy to further break into the space of dairy, which is commonly known for its high-protein content.

“We call this competing for ‘share of stomach.’ On our end, we can provide easily soluble protein that can be added to further increase dairy protein levels, emulsifiers, cultures and enzymes – all of which impact both the taste and texture of a product.”

A common demand by consumers in the dairy space is to enhance gut health properties. “Dairy products can buffer stomach acids, which can allow good bacteria to survive and make it to the large intestine to assist with digestion,” notes Prado.

“Many new health claims will come with these rising consumer expectations, especially among yogurt launches. Overall, consumers are looking for dairy products to help balance bacteria in the digestive system, boost the immune system, to feel more positive about health and to aid in digestion.”

Prado adds: “We also see consumers choosing plant-based products due to lactose intolerance, which often causes digestive discomfort.”

While plant-based products are a great alternative, IFF recognizes that there are some consumers who want animal-based dairy products that can still avoid lactose and meet their dietary needs.

Characterized probiotic strains
For AB-Biotics, creating more accessible options for specific health indications can help manufacturers appeal to wider consumer demand in the probiotics space.

“We are expanding our Yogumel range of probiotic yogurts made with characterized probiotic strains to target specific health areas beyond microbiota modulation,” notes Audivert.

Yogumel Defenses and Yogumel Digestion are probiotic yogurt sachets formulated with high-potency live bacteria to ferment milk at home. “Ensuring safe, natural and sustainable yogurt production at home is, in our opinion, the obvious evolution of the fermented dairy category,” he affirms.

The company is also in the process of developing a vegan addition to the Yogumel portfolio that will allow consumers to make plant-based yogurt at home, regardless of their dietary requirements or lifestyle choices.

“There are several challenges that come with plant-based fermentation, including texture and flavor mimicking. Our latest offering will help dairy players avoid these obstacles and get to market faster,” adds Audivert.

Market challenges
Yurgec at Ingredion says while overall dairy space is highly competitive, there are significant spaces for products that can stand out from the rest.

A common demand by consumers in the dairy space is to enhance gut health properties.“The dairy market has been sensitive to inflation over the past two years. The same is true of plant-based dairy. For these newly launched products to be successful, they must show differentiation in their taste, nutrition and texture compared to other offerings.”

Major dairy manufacturers are starting to play into the plant-based dairy market and they have the scale to bring more innovation to the consumer base, Yurgec maintains.

Staying ahead of the competition
For IFF’s Prado, he says the company considers both categories as important and the ingredient manufacturer is investing in opportunities for both.

Jerry Powell, senior sales director for dairy at Corbion, reflects that the dairy space is undoubtedly a competitive market.

“There are numerous established players and a constant influx of new entrants and product offerings, especially with the influx of plant-based and lactose-free offerings. As a dairy ingredient supplier, we recognize the importance of differentiation and staying ahead of the competition.”

“The competition between dairy and plant-based dairy applications is an evolving dynamic in the industry,’ adds Wunderly at Corbion.

“While plant-based alternatives have gained traction and consumer interest, dairy products still maintain a strong foothold. We believe that dairy and plant-based dairy products have distinct consumer bases and can coexist. At the same time, we recognize the importance of exploring the plant-based segment to cater to a wider range of consumer preferences.”

By Elizabeth Green

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