CULTURED DAIRY IS GOOD FOR THE GUT

TEAM B - TULYA, DAIRY TECHNOLOGY.

In today's refrigerated grocery store aisles, customers can find a plethora of cultured dairy options including yogurt/skyr, sour cream, cottage cheese, cream cheese and kefir. From whole-milk lcelandic skyr to low-sugar yogurt to cottage cheese with savory mix-ins, the category certainly isn't struggling from a lack of innovation. However, according to global market research firm Mintel, it might be too much of a good thing.

Brands have attempted to compensate for poor performance with increased innovation, ultimately crowding the marketplace and leading to cannibalization as consumers try product after product without increasing total purchases," notes Mintel in its "Yogurt and

Yogurt Drinks US - November 2019" report.

Since peaking in the 2000's with the introduction of Greek yogurt to the U.S. market, American yogurt consumption has gone down. Mintel explains that total sales fell 3.6% between 2018 and 2019 as consumers switched between brands and formats without actually buying more yogurt.

"People on the coasts actually do have the same consumption as European markets, but a lot of households here are not in [thel yogurt category at all" he notes. "It's a 'tale of two

cities' kind of market: Those who think yogurt is for dieting and for women only and those in San Francisco or Brooklyn who think it's too sweet." The trick to growing the category might lie in showing that cultured dairy products can taste great while serving a functional health purpose.

"Consumers are searching for healthy products without compromising on taste, and dairy

products are best suited to do so", says Jorge Ramos, CEO of Dallas-based Lala U.S. Inc. Showcase functionality Despite falling sales, the cultured dairy category has reason for optimism. More and more Customers are interested in wellness, and cultured dairy already has a health halo.

"As consumers largely turn to yogurt because they feel it is healthy, emphasizing the nutritional benefits offered by each style, type or brand will guide consumers toward the product that best suits their needs", Mintel says. But "healthy" means something different today than it did in the past, Ramos says. Customers now look for products with specific functional benefits. Luckily for the cultured dairy category, probiotics are one of the most sought-aftermnutritional claims.

"Consumer awareness around the benefits that probiotics provide has gained traction, with people understanding that your gut is an essential part of the immune system, and having the right balance of bacteria in your gut is important to maintaining good health," says Christopher Malnar, vice president of marketing for Londonderry, N.H.-based Stonyfield Organic. The company recently introduced Stonyfield Organic Daily Probiotics probiotic yogurt drink shots that come in an easy-to-drink snack-sized format. The shots are available in Blueberry, Pomegranate and Strawberry Acai flavors and contain billions of probiotics that help support immunity and digestive health.

"The proactive health segment is driving growth for the yogurt category, growing at a rate of +13% in 2019," explains Malnar. "Increasing consumer interest in preventive daily healthcare continues to fuel demand for convenient products made with probiotics." Pedro Silveira, president, U.S. yogurt, Danone North America based in White Plains, N.Y,

and Broomfield, Colo, agrees that probiotics Pedro Silveira, president, U.S. yogurt, Danone North America-based in White Plains, N.Y, and Broomfield, Colo. -agrees that probiotics continue to be a hot trend. In response, Danone recently added a new product line to its Activia brand: probiotic smoothies. The offerings combine "billions of live and active probiotics with juicy fruit, veggies and seeds, all with zero grams added sugar" the company says.


Less sweet treats


One of the biggest growth areas for cultured dairy is in reduced-sugar products. According to Erin Massey, product development manager for Prairie Farms Dairy, Edwardsville, ll., when low-fat formulations were popular, processors were forced to add more sugar to create a balanced flavor. "This new shift in consumer behavior allows us to get 'back to the basics' and reawaken and reimagine old favorites," she says.

According to Silveira, lower-sugar options are the fastest growing segment in yogurt today. Danone North America recently invested in sugar reduction with its Two Good Greek yogurt line. The yogurt is slow-strained with a patent-pending process down to 2 grams of sugar per 5.3-ounce cup. (The product also was the runner-up in the Dairy Foods 2019 Top 10 Best New Dairy Products pol).

Building on Two Good's success, Danone North America debuted Activia Less Sugar & More Good at the beginning of this year. The line contains only 9 grams of sugar, 40% less than regular Activia Greek nonfat yogurt; its sweetness comes from honey and fruits

instead. The yogurt is available in Fig & Cinnamon, Pineapple & Passion Fruit, Pear & Ginger and Blueberry & Cardamom flavors. And Noosa Yoghurt, a subsidiary of Sovos

Brands, Berkeley, Calif, introduced Noosa Hilo yogurt, which has more protein and less sugar than traditional yogurt. According to the company, Noosa Hilo contains 12 grams of protein and 12 grams of sugar per serving. It comes in six flavors, including Vanilla Bean,

Blueberry, Mixed Berry, Strawberry, Plain and Peach.

Sandfort says using enzymes to break down lactose is one way to produce cultured dairy that tastes sweeter without actually adding in more sugars another way is adding sweetness through fruits. And sometimes, customers are just OK with the yogurt tasting less sweet. "Chobani less sugar yogurt actually is less Sweet he says. "The consumers adjust their palate."

Dairy doubters

It's not enough to just produce healthy products, Ramos says. Processors also need to

communicate the nutritional benefits of these offerings to consumers. This is especially important with the increasing competition from plant-based alternatives "As processors, we are challenged to be more innovative and clearer about the benefits of dairy products so that consumers can easily recognize the nutritional value of them and the superiority of some nutritional elements of dairy products when compared to alternative plant-based products," he notes.

Malnar agrees that it's important for dairy Companies to communicate the nutritious qualities of dairy with customers. "Organic dairy is one of the best-quality sources of protein" he says. Proteins from milk are complete proteins designed to build healthy muscles and bones and satisfy hunger. They are one of nature's purest and most nutrient-dense foods."

Some consumers want to eat dairy products, but have the perception that they have digestive issues when doing so. While a small percentage of people actually are lactose-intolerant.

Sandfort says upwards of 25-30 believe they are. And it is important to ensure that this Customer base feels heard "Perception is reality in this time," he adds. Ramos Concur, "We recognize that many consumers have real digestive challenges, so we need to be constantly talking to them to better understand how we can continue to make dairy part of a healthful and tasty diet," he says.

Silveria says that there also is value to creating products for people who don't eat dairy whether due to health issues or dietary choices. "As the flexitarian lifestyle continues to evolve Silveria says that there also is value to creating products for people who don't eat dairy whether due to health issues or dietary choices. "As the flexitarian lifestyle continues to evolve and gain popularity, companies will need to provide consumers with the choices they need and want" he explains. "We are a leader in plant-based yogurt alternatives, and we also continue to be the leading yogurt maker in the U.S. We do both by continuing to add value to the category Overall and give consumers reasons to keep Coming back to the yogurt aisle."