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August 15, 2006

Dairy companies target the health-conscious

The health and wellness revolution has clearly arrived in the dairy sector but this has been coupled with increasingly sophisticated segmentation by consumer group. Elena Ruiu of Euromonitor International looks at how these trends have influenced new product development in the dairy market.

The health and wellness revolution has clearly arrived in the dairy sector but this has been coupled with increasingly sophisticated segmentation by consumer group. Elena Ruiu of Euromonitor International looks at how these trends have influenced new product development in the dairy market.

Concerns over cholesterol and lactose intolerance aside, dairy products have always had pretty respectable health credentials. After all, the first food we consume when we arrive in the world is a dairy product, so what could be more natural and wholesome?

Therefore the idea of marketing dairy products on their health benefits may seem obvious, and can hardly be considered new. But recent years have seen an enormous proliferation of healthy product variants in the dairy sector, as the functional and health and wellness trends have taken grip in the market. Moreover, greater sophistication in terms of market segmentation has meant many of the new healthy dairy products are targeted at specific consumer groups with particular perceived health needs.

Health is undoubtedly one of the major factors driving and defining segmentation within dairy products. The general level of health awareness continues to rise as consumers learn more about their individual nutritional requirements.

For example, the development of healthy, adult-orientated products, such as the For Goodness Shakes and Sveltesse Optimise, has been one of the key drivers behind the strong growth seen in the dairy-based drinks sector. General Mills introduced an adult, drinkable smoothie version of its children’s brand Go-GURT in 2005, which claims to have less fat per ounce than comparable products and to provide an excellent source of calcium and vitamins A and D.

The baby-boomer generation is a particular focus for manufacturers, not least because it represents a huge constituency of consumers at the peak of their spending power. Moreover, as they age, baby-boomers are becoming particularly health-conscious, concerned about preventing age-related conditions such as heart disease, strokes, various cancers and Alzheimer’s. As a result, they constitute a prime target for functional food products, a fact not lost on dairy producers.

Last year saw the introduction of a number of products containing plant sterols, which are believed to lower cholesterol levels and thus reduce the risk of heart disease. In the UK, the Flora pro activ and Benecol brands extended their cholesterol-lowering ranges into dairy product categories, such as milk and drinking yoghurt, products with a particular appeal for ageing baby-boomers.

Soy milk appeals to a similar consumer group, thanks to claims that soy has the potential to reduce the risk of various conditions such as prostate cancer, heart disease and Alzheimer’s disease. Soy milk manufacturers are also making a particular effort to target women, as soy is claimed to reduce the risk of breast cancer and osteoporosis and relieve symptoms of the menopause.

The role of calcium in preventing osteoporosis makes women a significant target group for many dairy product manufacturers, and particularly those offering new products fortified with calcium, such as CalciMilk from McNeil Nutritionals in the US, which is made from ultra-pasteurised milk and contains a patented calcium ingredient.

Women, who tend to be more health- and weight-conscious, have always been a target for health-orientated new dairy products since the emergence of low-fat, low-calorie products. However, as lower-fat dairy products have become commonplace, manufacturers are now appealing to specific health benefits in order to attract female consumers, in an increasingly competitive environment. General Mills targeted women with its Yoplait Healthy Heart yoghurt, which contains cholesterol-lowering plant sterols, as heart disease is the number one killer of women in the US.

Innovation aiming at women also resulted in products designed to benefit the external appearance alongside inner health, such as the Jeunesse brand of dairy products. Launched by Italian dairy company Parmalat in 2005, the Jeunesse range includes yoghurt, skimmed milk, fruit drinks and flavoured desserts.

The products are all enriched with the co-enzyme Q10 and a variety of vitamins said to have antioxidant properties. They are aimed principally at female consumers aged between 35 and 44 who, while not believing in miracle cures, pay attention to their health.

While women remain the most health-conscious consumers, men are also becoming increasingly aware of health issues, and manufacturers have begun to target men with health-orientated products. In China, for example, Xi’an Yinqiao Group introduced a powdered milk fortified with functional ingredients, including calcium and taurine, called Qinyong Xingainian for men, in 2005.

The increasing health-consciousness of parents has also helped drive the development of the children’s dairy products segment. This area has proved particularly attractive to manufacturers in developed markets. Ironically, falling birth rates in developed countries, while reducing the overall consumer base for such products, have pushed up the amount of disposable income available per child, creating significant opportunities for added-value products.

The UK is one of many markets which has witnessed significant product innovation in the children’s segment in the past eight years, with the launch of products such as Nestlé’s Munch Bunch Drinky + and St Ivel Balamory from Uniq Prepared Foods in 2005. Munch Bunch Drinky + is a probiotic drinking yoghurt for under-fives, while St Ivel Balamory is a fromage frais, targeted at pre-school children and marketed as being kind to children’s teeth.

In Spain, Leche Celta introduced the flavoured milk drink Celta Energia Y Crescimiento last year. Energia Y Crescimiento contains phosporus, calcium and 12 vitamins, and is aimed at children aged up to four, the same target group as Puleva Max Defensas, which contains breast milk bacteria. There are also many examples of healthier dairy products aimed at older children and teenagers.

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