Reinventing cheese as a naturally-healthier snack is the biggest growth opportunity for dairy companies, reveals New Nutrition Business in its new report, 10 Key Trends in the Business of Dairy Nutrition.
Cheese has had a major boost from scientific research showing that it is one of nature’s “naturally functional” whole foods, with no negatives either from fat or sodium content.* Now, new sales numbers show that connecting cheese to the snackification trend spells market success.
One of the most successful products launched in the US, with first year sales hitting $67 million, is Sargento Balanced Breaks, a snack that pairs cheese with fruit and nuts. Its winning marketing strategy highlights the convenience of a snack as well as cheese’s naturally-nutritious properties.
And consumers are willing to pay a premium price for a cheese snack. Sargento Balanced Breaks retail at a 150% premium to regular mass-market cheese. “For profitable growth, premium niches are the highest-opportunity, least-risk targets in dairy. In almost every case the most effective strategy for profitable dairy growth is to begin by focusing on the low-volume, high-value segments of the market”, says Julian Mellentin, director of New Nutrition Business.
Spire Brands is another company that found a simple solution for a growing consumer need. Its Moon Cheese snack – dried pieces of Gouda, Cheddar, or Pepper Jack in a convenient pack – hit a $10-million run rate in early 2016 with prospects to double annual revenues to about $20 million in 2017.
For years cheese has been out of favour because of its high fat content and faulty research linking it to cardiovascular disease. But new consumer awareness about the health benefits of cheese means there is scope for growth in countries where cheese consumption has been low. If Americans were to reach the same per capita consumption of cheese as France, for example, the US market would double in size.
Dare to be dairy-free
Just when a critical mass of science revealed that dairy is a natural whole-food with a wealth of health benefits, it is faced with some new negatives (thanks to online bloggers), and these are helping fuel the dairy-free trend.
“Non-dairy dairy is both an opportunity and a threat. Dairy companies must take note of the trend and know how to respond to it – which in many cases means entering the market,” says report co-author Joana Maricato, senior market analyst at New Nutrition Business.
Danone has turned non-dairy into an opportunity by acquiring WhiteWave, thus becoming both one of the world’s biggest dairy companies and the world’s biggest non-dairy company.
Almond and coconut milk brands have been capitalizing on people’s interest in digestive health (one of the most powerful trends in the food and beverage industry), positioning themselves as “easier to digest” than dairy milk. Addressing people’s worries about dairy and digestive wellness presents a wealth of opportunities for dairy, as the A2 cows’ milk brand has demonstrated in Australia, where it has taken a 12% share of the liquid milk market with its “easy to digest” marketing message.
*References available on request
NOTES FOR EDITORS
- 10 Key Trends in the Business of Dairy Nutrition is available on request from firstname.lastname@example.org
- Julian Mellentin is one of the world’s few international specialists in the business of food, nutrition and health. He is director of New Nutrition Business which provides case studies and analysis of success and failure in the global nutrition business and is used by more than 1,700 corporate subscribers in 42 countries.
- Joana Maricato is a senior market analyst at New Nutrition Business, where she focuses on identifying the best strategies for commercializing nutrition science and helping clients create new products with health benefits.
- New Nutrition Business is a research and consultancy company with an expert focus on the business of food and health since 1995. It has offices in the United States, Europe, and New Zealand and affiliates in Japan and South Korea.
- For more information about New Nutrition Business, or to arrange an interview with Joana Maricato or Julian Mellentin, contact Marta Matvijev at email@example.com.