Market

Market Trends and Opportunities for Functional Dairy Beverages Ranjan Sharma
www.OzScientific.com
Outlines
Introduction and background Current market trends in functional

dairy beverages Opportunities & strategies Challenges Conclusions
Introduction and background
Resources for market intelligence and trends
Food specific New Nutrition Business Novis e-Newsletters Nutritional Business Journal Food Technology magazine Functional Foods and Nutraceuticals magazine Just-Food/Just Drinks.com Health Focus Strategy Others. Food inclusive Nutraceuticals World magazine Mintel (e.g. GNPD database) Market research companies (Datamonitor,
Euromonitor, BCC, Market Research, etc.)
Introduction
Resources for market intelligence and trends
Food company Websites Media releases Annual reports Other resources Other media Web sites (newspapers, TV, Research
Journals, etc. Trade journals Company profiles (e.g. IBISWorld, Hoovers, etc.) News feeds (e.g. RSS feeds)
Introduction
There is a massive amount of
information and often confusing for manufacturers and consumers Nutritional and clinical studies are abundant and highly relevant, but can be biased and inconclusive There are a number of food fads that affect the whole food value chain
E.g. low-carb is OUT and low-GI is IN
Consumer and market trends

New Nutrition Business*
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
Health Intrinsic health Good foods, bad foods Good carbs, bad carbs Personalised nutrition Bars and beverages Daily dose and packaging innovation Out of supplement aisle Asia for inspiration Kids nutrition crisis
Food Technology**
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
Quick fix Drive & Go Inherently healthy Premium foods Farm-friendly, organic, natural Ethnic flavours Grazing Low or no claims Self medication with food Global brands
USDA***
1. 2. 3. 4. 5.
Pleasure Convenience Health Well being Ethics
*New Nutrition Business, Dec-Jan 2005 ** Food Technology, April 2005 ***USDA GAIN Report E35067 Apr 05
Summary
Three most identified trends/drivers

for functional foods innovations
Each of these drivers require in-depth

analysis and compliance to succeed in the market
Pleasure Convenience Health
Summary - Three key drivers/trends

Taste Flavour Colour Texture
Pleasure
Packaging Pack size Convenience Availability (Time/place) Health
Nutrition Low claims (fat, calorie, sod., carb etc) High claim (e.g, Ca, fibre, omega 3, etc) Physiological functional claim
Global functional foods market

Global functional foods & beverage sales, 2003
30 25 20 15 10 5 0 Beverages
Sales 2003, US$ billion
Dairy
Bakery & snacks
Growth % (CAGR 1998-2003)
Euromonitor, 2004
9 www.OzScientific.com
Functional food major markets, 2003

Global functional foods & beverage sales
14 12 10 8 6 4 2 0
an an y ce Fr an Ja p G er m Br az il
US$, billion
SA
U K
Euromonitor, 2004
10
Ita
ly
Global functional foods by functionality

Global functional foods by functionality 2003
9% 2% 10% 42%
Sport & enery Added vitamins, minerals or supplements Promotes intestinal health or digestion Added calcium Lowers cholesterol
19%
18%
Other
Euromonitor, 2004
US functional foods - 2003

Category Sports & energy drinks Breads & grains Snacks & bars Juices Dairy & dairy alternatives Tea & coffee drinks All other Total
12 Nutrition Business Journal
Size (US $ billions) 5.3 4.2 2.3 2.2 2.5 1.1 5.2 22.8
Growth rate (% vs 2002) 19 1 13 6 10 4 8 9

Global functional dairy products

Functional dairy products - Market share 2003
14%
1%
Liquid & powder milk Yogurt & chilled desserts Oils & fats Cheese
48% 37%
Euromonitor, 2003
Dairy companies of today!
14
www.natrel.ca
Trends & innovations in the dairy beverage market
Pleasure & indulgence Lifestyle, consumer marketing beverages Functional, health and wellness beverages Adult medical/complete nutrition Sports & performance
15
Pleasure & indulgence
Flavoured milk Milk-coffee drink Milk-tea (Chai Latte)
16
Flavoured milk trends recognised confectionery brands
17
Flavoured milk targeting kids
Swerve (Coca-cola) Cadbury Concentrated milk (Regilait, Fr)
Bubble gum Flavour carbonated (Mac Farms)
18
Dairy-coffee beverages
Nestle, Japan Namyang (Korea)
Caffe Latte (Emmi, Swiss)
Meiji, Japan Cappucino (Starbucks/Pepsico)
19
Dairy-tea beverages
Starbucks
Oregon Chai
20
Lipton Chai
Lifestyles & consumer marketing beverages
Low-fat Fat-free Low-carb Organic GM-free
21
Low-fat milk
Low-fat, lactose free
22
Fat-free milk
23
Low-carb dairy beverage
24
Organic dairy beverages
Pauls, Australia Organic Valley, US Rachels UK
Candia, Fr
GM free milk
UK Consumers Willing to Pay More for rBGHFree Milk (genetically engineered growth hormone rBST (recombinant bovine somatotropin).
Tiroler, Austria
Functional, health and wellness beverages
Fortified with
Milk rich in melatonin Probiotic yoghurt drinks

27
Minerals (Calcium, Magnesium, Iron) Omega-3 fatty acids Conjugated linoleic acids (CLAs) Phytosterol Lactoferrin Peptides
Fortified milk - calcium
28
Fortified milk Mg & Iron
Mg (Candia, Fr)
Mg (Lactalis, Fr)
Fe
Fe (Meiji Love)
Fortified milk - Omega 3 fatty acids
Candia, France Natrel, Canada Anchor, NZ

30
Nestle, Malaysia PB Foods, Australia

Fortified milk - Omega 3 fatty acids
St Ivel advance (Dairy Crest UK)
Neilson, Canada
31
Dawn, Ireland
Beverages with dairy bioactives
CPP and IgG rich milk
32
Fortified milk Conjugated Linoleic Acid (CLA)
NaturLinea, Spain
Fermented milk peptides
Peptides (Valio)
34
Milk with phytosterol
Phytosterol (Unilever)
35
Melatonin rich milk
UK
Finland
UK
www.night-time-milk.com
36
Trends in functional yoghurt drinks
Probiotic Yoghurt smoothie Lactoferrin Plant extracts Antioxidants Fibre Peptides

Probiotic drinking yoghurt revolution
http://www.actimel.com http://www.yakult.com.au
39
As reported by Group Danone Health Commitment and Fact Book, March 2005
40
As reported by Group Danone Health Commitment and Fact Book, March 2005
41
Probiotic drinking yoghurt
Nestle, Japan National Foods, Australia Danone

42
Emmi, Italy
Probiotic innovation
LifeTop Cap (Biogaia, Sweden)
LifeTop Straw (Biogaia, Sweden)
43
Drinking yoghurt with phytosterols
Blue Bunny (US) Benecol (UK) Emmi Benecol (Valio) Flora Proactiv (Unilever)
44
Innovations in drinking yogurt
Lecithin Yoghurt drink (Alpenmilch Saltzberg)
Bonne Nuit with plant Extracts (Novandie, Fr)
Aloe Vera (Emmi)
45
Innovations in drinking yoghurt
Black fruit pulp With Mg (Danone, With green tea (Morinaga, Japan) (Poland) Belgium)
Yogurt drinks with lactoferrin
With lactoferrin (Morinaga) With L.casei and Lactoferrin (Kyodo Milk)
47
Innovations in drinking yogurt
With protein, With protein, Fibre, vit & minerals Vit. & minerals (Glanbia, Ireland) (General Mills, US)
48
Probiotics with cranberry juice Ocean Spray, US
Adult medical/complete nutritional beverages
Meal replacement nutritional

supplement Disease-specific beverages
49
Complete nutritional beverages pharmaceuticals to consumers
www.ensure.com
Complete nutritional beverages
Novartis
Ross Abbott
Novartis Power Bar Pria

51
Nestle
Complete nutrition - liquid breakfast
Aussie Bodies, AU
Sanitarium, AU Meadow Fresh, NZ
52
Carnation Junior, Nestle
Sports and performance
Sports beverages Whey-based drinks
53
Sports/performance beverages
54
Opportunities and strategies
Analyse market and meet consumer needs and demands Growing affluence in developing world Increased affordability Lifestyle diseases in developed world Target Obesity opens up markets for CVD, diabetes,

55
Aging population Dairy from birth Globalisation Consumer awareness and self medication Individualised nutrition Nutragenomics
cancers etc.
Dairy bioactives not yet fully exploited

in beverages
lipids, etc.)
Peptides, immune and growth factors, Forging partnerships with non-dairy

bioactive ingredient companies
Looking beyond dairy for bioactives Developing novel milk beverages

proteins for wider acceptability
56
Clear milk beverages from skim milk or

Promoting dairy as a preferred carrier

for bioactive ingredients
General acceptability Flavour Inherent nutrition Convenience
57
Challenges
Lack of knowledge/understanding

58
Communication gap
Food technologist/scientist has limited understanding of human physiology Nutritionist/health professional does not take into consideration of intricacies of food formulations Conflicting and biased nutritional studies Challenges of market fads Among food technologist, health professional, nutritionist, marketer Working along regulators or working around regulations?
Regulatory hurdles
Challenges
Formulation challenges
Innovation challenge
Non-dairy ingredients incompatible in dairy environment stability issues Ingredient interactions Efficacy issues Safety issues Low R&D investment (Australia 0.3% of TO vs 0.8-1.2% worldwide) Risk averse nature of food companies not leading from front? Where is the IP? Companies wanting to have immediate ROI
59
Thank you !
OzScientific offers independent, costeffective and innovative solutions for functional & bioactive ingredients
Business intelligence: Market intelligence, Strategic analysis and Innovation management Ingredient innovations: Concept to commercialisation Ingredient knowledge: Desktop scientific and technical reviews
Industry intelligence on functional foods (free newsletter!) Australasian functional food resources (under development)
OzScientificTM Weekly Digest
60

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Market Trends and Opportunities for Functional Dairy Beverages Ranjan Sharma

Introduction and background Current market trends in functional

Introduction and background

Resources for market intelligence and trends

Resources for market intelligence and trends

There is a massive amount of

E.g. low-carb is OUT and low-GI is IN

Consumer and market trends

Three most identified trends/drivers

Each of these drivers require in-depth

Pleasure Convenience Health

Summary - Three key drivers/trends

Packaging Pack size Convenience Availability (Time/place) Health

Global functional foods market

Bakery & snacks

Growth % (CAGR 1998-2003)

Functional food major markets, 2003

Global functional foods by functionality

US functional foods - 2003

Growth rate (% vs 2002) 19 1 13 6 10 4 8 9

Global functional dairy products

Dairy companies of today!

Trends & innovations in the dairy beverage market

Pleasure & indulgence

Flavoured milk Milk-coffee drink Milk-tea (Chai Latte)

Flavoured milk trends recognised confectionery brands

Flavoured milk targeting kids

Swerve (Coca-cola) Cadbury Concentrated milk (Regilait, Fr)

Bubble gum Flavour carbonated (Mac Farms)

Caffe Latte (Emmi, Swiss)

Meiji, Japan Cappucino (Starbucks/Pepsico)

Lifestyles & consumer marketing beverages

Low-fat Fat-free Low-carb Organic GM-free

Low-fat, lactose free

Low-carb dairy beverage

Organic dairy beverages

Pauls, Australia Organic Valley, US Rachels UK

Functional, health and wellness beverages

Milk rich in melatonin Probiotic yoghurt drinks

Fortified milk - calcium

Fortified milk Mg & Iron

Fortified milk - Omega 3 fatty acids

Candia, France Natrel, Canada Anchor, NZ

Nestle, Malaysia PB Foods, Australia

Fortified milk - Omega 3 fatty acids

St Ivel advance (Dairy Crest UK)

Beverages with dairy bioactives

CPP and IgG rich milk

Fortified milk Conjugated Linoleic Acid (CLA)

Fermented milk peptides

Milk with phytosterol

Melatonin rich milk

Trends in functional yoghurt drinks

Probiotic Yoghurt smoothie Lactoferrin Plant extracts Antioxidants Fibre Peptides

Probiotic drinking yoghurt revolution

Probiotic drinking yoghurt

Nestle, Japan National Foods, Australia Danone

LifeTop Cap (Biogaia, Sweden)

LifeTop Straw (Biogaia, Sweden)

Drinking yoghurt with phytosterols

Innovations in drinking yogurt

Lecithin Yoghurt drink (Alpenmilch Saltzberg)

Bonne Nuit with plant Extracts (Novandie, Fr)