Revitalising the dairy sector requires innovation to counter slight volume growth. This encompasses creating novel products aligned with evolving consumer tastes, like plant-based alternatives and healthier, sustainable choices. The report delves into functional dairy targeting need states and gut health, advancements in lifestage nutrition (with a focus on ageing consumers and women's health), plant-based and sustainable dairy opportunities, and the potential of experiential dairy.
This report comes in PPT.
The global dairy products and alternatives industry’s strong growth in 2023 (6.4%) is mostly due to price hikes, while volume growth remains marginal. To tackle the ongoing inflationary pressures, companies are actively seeking solutions, including adjusting prices directly, making changes to product formulations and exploring shrinkflation as a means to navigate the challenges posed by inflation.
Health and wellness is paramount in the dairy industry. Protein continues to be a promising pocket of growth. There is also a growing emphasis on innovation in gut health and need states. Among these, energy and cognitive function positionings have seen the most development, although remain niche. Another key area is targeting functional dairy to cater to the specific needs of different life stages.
Amid health and sustainability, plant-based dairy continues to flourish, despite a 2022 slowdown due to supply chain disruptions. 2023 and the forecast period show promise, driven by innovations in plant-based cheese and non-soy milk alternatives. On the other hand, genetic engineering, precision fermentation and cell-cultured dairy hold disruptive future potential but can face consumer scepticism.
Though the majority of consumers worldwide desire to have a positive eco-friendly impact, few pay extra for sustainable food and drinks. Western markets drive the growth of sustainable dairy due to heightened awareness, while affordability hinders emerging markets. Notably, France and Germany exhibited remarkable growth in sustainable dairy products in 2022, indicating promising opportunities.
The dairy industry should tap into experiential elements to succeed via innovative flavours, sensory exploration, and multicultural influences. Incorporating ethnic tastes, texture variations (ie fizzy dairy drinks) and tech-enabled experiential shopping will help elevate the sensory appeal. E-commerce, social media and the metaverse will also help foster interactive engagement with consumers.
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