With the World Dairy Innovation Awards 2020 now open for entries, FoodBev takes a look at the five top trends that are shaping the international dairy industry today.

Sophisticated snacking

The changing lifestyle of consumers, including the decision to opt for smaller meals, is driving the demand for new innovative, healthy, on-the-go dairy snack options. According to Statista research department, 35% of adults in the UK say they skip at least one meal a day in favour of snacking due to both convenience and time. This change in consumer behaviour has forced established brands such as Kraft Heinz and Danone to expand their portfolios with guilt-free, indulgent practical versions of their products. 

Convenience, time and delicious goodness are key factors that brands are focusing on across the dairy snacking industry, from reformatting traditional dairy products into drinkable cartons or hand-held bars to less sugary cheese snack bars. Within a market report conducted by Mordor Intelligence, the global dairy snack market is set to register a CAGR of 5.14% during the forecast period 2020-2024. 

Ditch the dairy 

Health-centric consumers are gravitating towards dairy alternatives at a rapid rate, with a report by Innova market insights revealing that 32% of consumers buy dairy alternatives simply “because they’re healthier” and 27% of those surveyed said they bring variety to their diet. The report also highlights that young consumers are the most predominant demographic to swap to dairy alternatives due to increased awareness of animal welfare and their environmental footprint. As a result, the dairy industry has been profoundly impacted by the growth of plant-based alternatives and growth is set to increase in 2020 with better innovation in texture, nutrition and ingredients. 

The alternative-milk aisle is already crowded by a diverse range of nut milk, oat milk, coconut milk, brown rice milk, sesame milk, banana milk and the latest addition of pea milk, but Kantha Shelke, a member expert at the Institute of Food Technologies, believes even more “seeds and nuts are going to come into the fray”. It is evident dairy alternatives are set to expand across all categories of the global dairy industry, with alternative desserts, whipping cream, cheese and smoothies hitting the shelves. 

One of the most popular dairy alternatives set to see growth is oat-based products such as cold brew coffee, spreads and chocolate snacks, as consumers are becoming more educated with the health benefits of oats, as well as the ingredient’s sustainability and clean label credentials. 

Innovation acceleration 

With the rapid rise of alternative dairy products filling the shelves,  mainstream competitors are challenged to offer new, high-quality innovations that provide all-round consumer satisfaction. Young millennials are increasingly demanding new adventurous flavours such as savoury and spicy yogurt dips, flavoured butter and alcohol-infused ice cream. As well as new flavours, consumers are seeking texture enhanced offerings that create a pleasurable experience and offer a greater feeling of indulgence. A study carried out by Innova Market Insights finds an average 45% of US and UK consumers are influenced by texture when buying food and drinks, while 68% share the opinion that textures contribute to a more interesting food experience. 

Most specifically, the global ice cream market capitalises on consumer demand for innovative flavours, texture and premium low calories health alternatives. Ice cream brands are tapping into the health and wellness trend, as well as being more environmentally aware, a necessity to maintain a strong position in the market. As we enter a new decade, consumers should expect to see a wide array of innovations from unusual flavour pairings and functional ingredients to low-calorie options, plant-based and lactose-free options.  
Gut feeling: the benefits of fermented dairy

Consumer awareness around gut health continues to rise in 2020 with people becoming increasingly educated on the importance of a healthy, functioning gut and how it can determine consumers overall well-being. To reach optimal gut health, researchers suggest eating more dairy that is rich in probiotics, fibre and prebiotics which can be found in fermented dairy products such as kefir, milk, cheese, yogurt and gut shots. A 2017 study from The Nutrition Society found that the health benefits of fermented milk drinks such as kefir included improved digestion, anti-inflammatory effects and the stimulation of antioxidants which can aid disease prevention.

Kefir has emerged as a popular option in the dairy space. A lightly fermented milk drink with a similar but thinner texture to yogurt, kefir has a strong health profile, packed with high levels of vitamin B12 and B1, thiamine, calcium, folates and vitamin K2,  therefore gaining a reputation of improving gut health and digestion. Kefir taps into consumer preference for less-sweet, sour and bitter flavours, as concerns over sugar intake grow. More brands are expected to take on and develop products containing kefir grains.

As we move into 2020, we can expect to witness significant momentum in fermented dairy due to the positive influence on gut health and digestive wellness. According to Mordor Intelligence, we are predicted to see a 9% compound annual growth rate between 2019 and 2029, the prebiotic ingredients market is gaining global recognition by companies, forcing them to re-evaluate their current products nutritional profile and investigate new innovations that offer consumers a powerhouse of beneficial probiotics. It could be argued that gut health is now the fastest growing trend in dairy. 

Technology transformation

The use of technology within dairy farming is set to evolve greatly over the next decade as the worldwide dairy industry seeks to improve efficiency, reduce costs, and comply with its corporate social responsibilities. Current technologies that have already made an appearance in boosting milk production and herd management include the use of drones to monitor land and cows, collar technology to evaluate cow’s health and production levels, facial recognition and robotic cow milking equipment, which not “only milks the cows, but it also washes, massages and feed cows.” said Blue River Dairy founder, Chen Yuanrong. 

Finally, a trend that is currently in its early stages but is witnessing growing interest by the day, is lab-created dairy. With this technology, airy proteins will be produced in the lab, for use in fluid milk products and processed dairy products such as yogurt and cheese. The addition of lab-created dairy could be highly valued amongst consumers who are cautious of both animal welfare and their environmental footprint. However, lab-grown dairy still faces several formulation challenges including the ability to mimic the taste and texture of conventional dairy.