Dairy alternatives continue to make inroads with consumers around globe, Cargill finds

By Hank Schultz

- Last updated on GMT

Photo courtesy of Cargill
Photo courtesy of Cargill
New consumer research from Cargill has implications for formulators of functional foods, sports nutrition products and dairy products. Dairy ingredients are generally in decline, while plant-based alternatives are filling in the gaps.

The new research was presented this week by the food industry giant at the Institute of Food Technologists trade show.  The research looked at consumers’ views of dairy products and alternatives.

Dairy in decline

As far as market metrics go, Cargill found a picture of overall decline for dairy ingredients. One of the big indicators, fluid milk sales, is off significantly in North America.  Consumption of fluid milk in this market declined by 22% in the 2006-2016 time frame. And in Europe, dairy sales decreased $3.6 billion in the 2012-2017 time frame.  But sales rose in Latin America, even though consumers there still spend less than half what they do in the US or Europe.

The big takeaway is that milk alternatives have increased significantly. Cargill’s figures show a triple digit increase in dairy alternatives in the 2000-2016 time frame.

The market size revelations are really just the bedrock of the report. Cargill was seeking to discover what’s driving these changes by finding out how consumers are thinking about these products. 

“Our intent was to figure out what’s important to consumers, so that our customers can develop the most appropriate products for their markets,”​ Pam Stauffer, Cargill’s global marketing programs manager, told NutraIngredients-USA on the show floor in Chicago. The research gathered market metrics and queried consumers in the following countries: the US, Mexico, Argentina, Brazil, UK, France, Spain, Germany, Denmark, Russia, China, Japan and Indonesia.

Clean label importance depends on market

One of the interesting findings was how important ‘clean label’ ideas are in the various markets. The answer to that question is more nuanced than one might think.  In Germany, for example, consumers were not particularly concerned about this kind of question in relation to dairy products, which seems odd given that the country is a hotbed of anti GMO activism.

“German consumers have a history of being open to certain kinds of processing,” ​said Mark Fahlin, Cargill’s business development manager for dairy.  “They are open to a lot of highly processed meats, like sausage, for example.”

In Asia Pacific, however, there were more consumers seeking dairy ingredients marketed under clean label ideas than in other regions.  Fahlin said this could well be ongoing fallout from the melamine scandal of a number of years ago.

Probiotics sales soar, while yogurt stumbles

One of the dairy products that plays in a big way across categories is yogurt. This category helped drive the early market expansion of probiotics in general, which rode to some extent on the coat tails of the massive Activia ad campaign. While the probiotics market has soared on from that beginning, the market for yogurt fell. Hard.

“Yogurt has declined for the past seven or eight years in Europe,”​ Fahlin said. “One problem there, which is I think is true of the US, too, is that there is just an ocean of SKUs.”

Fahlin said that one way brands could still rise to the top of what has been a falling tide is to drill down to the product’s benefits. The Activia marketing halo has faded, but Fahlin said the claim can still be a good one.

“I think manufacturers that either add probiotics or can double down on a probiotics claim and still do it in a consumer friendly way can still find success,”​ he said. 

Dairy alternatives coming to the fore, especially in Asia

Cargill’s research found that dairy alternatives are making increasing inroads into the market. The most accepting market was Asia Pacific. 

Dairy alternatives included nut and soy milks and milk like protein beverages based on plant proteins. In China, 54% of consumers queried said that had consumed both dairy and dairy alternatives.  In Indonesia, the figure was 51%.

The biggest issue for these alternatives is taste, which should come as no surprise. In some markets, such as Russia, the taste of dairy is still preferred.  But the alternatives continue to gain market share, and Cargill has addressed the taste issue with a suite of alternative sweeteners and protein offerings.

Cargill’s EverSweet line of steviol glycosides from fermentation has now achieved full market penetration with the first shipments of commercial quantities in the past couple of months. And the company has been working with partner Puris on boosting the supply of its pea protein ingredients, which are noted for their clean taste.

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