Focus: Dairy market continues to deliver key developments despite alternative ingredients growth

The dairy market may not have gained quite the same level of press in recent times as its growing range of alternatives, yet it’s a truly global market with plenty of life left in it, as editor Neill Barston reports

As far as the confectionery sector is concerned, the past few years have seen a major focus on delivering dairy alternatives catering for lifestyle choices and dietary requirements.

With sustained growth patterns, it’s likely the trends revealed by vegan pioneer brands such as the UK’s Plamil Foods, and more recent entrants including Moo Free and HiP chocolate are encouragingly entering the mainstream food and drink market.

While their rise may have stolen a little of the media limelight over ‘standard’ ranges in recent times, there have still been some notable dairy developments within the confectionery sector.

Perhaps one of the biggest stories as far as Britain is concerned, is the return of the iconic Dairy Milk chocolate to UK production, where the brand first began over a century ago, and remains a worldwide best seller. So it seems there’s still life in dairy yet, with all major premium brands from Mars, Nestle and Mondelez, through to Ferrero, Hershey, as well as luxury firms such as Switzerland’s Lindt and Prestat in the UK, have all been actively enhancing their dairy-based confectionery.

According to recent research from Innova Market Research, Europe as a whole is particularly forward-thinking when it comes to innovation in the segment. Its latest trends observations found that almost half of global dairy launches were those being delivered within Europe in 2020. There has also been a spotlight on ethical claims that have been notable in the US, where last year, a total of 28 per cent of dairy launches in North America were featuring a claim related to animal welfare, human welfare and/or the environment. In terms of the fastest growing active health claims tracked in dairy launches over the past four years, immune boosting ranges were up by a total of 17 per cent, skin health series by 16, prebiotic increased 15 per cent and probiotics were up 12 per cent).

For this year, Innova established five trend areas for dairy. Firstly, ingredient provenance, with customers seeking familiarity. Secondly, category crossovers are increasingly important, offering permissible indulgence with hybrid products. Another factor is that of the rise of macronutrients, such as high-protein, low fat or sugar reduction.

Other key trends are a rising new generation of hybrid probiotics set to hit our shelves, while its final tip is greater demand for layers of fruits for textural indulgence, with consumers seek out premium experiences.

Ice cream developments

As for ice cream, it’s a category that appears to have shown some degree of resilience, and as previously reported, the trend for global releases continues apace. Before the pandemic, between 2015-2019, global launches of low sugar ice creams increased by 48 per cent. In contrast, launches of low/no/ reduced fat ice creams dropped at a CAGR level of 12 per cent over the same period, with consumers also consequently showing a strong interest in ‘clean label’ natural ingredients.

Making waves in European and global markets

One such company increasingly making its mark upon the global ice cream market is Latvian-based Food Union, which has continued its rapid increase in delivering new series, even amid the pandemic.

Last summer, the business sought to reach out to customers directly in setting up a doorstep delivery service in key territories in its home nation and Lithuania, Romania and Denmark.

According to its sales results, the business attained five per cent sales growth amid challenging conditions. As it works across nine European countries, it reported a total of 117 new products with strong focus on bespoke regional flavour nuances. Its export business to South East Asia is also continuing to blossom, from near zero sales in the first quarter of 2020, to revenues of €2.1 million by the end of the year.

As its European CEO Normunds Staņēvičs (above), explains to Confectionery Production (See our exclusive video interview with him here) , while there have clearly been challenges over the past year, it’s also proved a notably rewarding period for the business. “We’re approaching the first anniversary of the pandemic and can look back and see how it has gone for everyone.”

“For us, it has been a very successful year in many respects – it brought the fruits of previous work that we have done setting up digital platforms and infrastructure for our business came into the fore, which we benefitted from,” explains the Riga-based CEO, who says that having company interests in China meant that it quickly had to establish policies of working from home and taking measures to protect its employees.

“Moreover, during the pandemic the digital tools and ecommerce that we started to develop and launch in Latvia, Lithuania, Romania, Hong Kong, we also saw that our doorstep delivery service in Scandinavia grow. We found that business surged, and with people being at home, we saw that as a great opportunity to interact with them through mobile apps and digital tools, so we took the chance to learn a lot about want consumers wanted. That resulted in significantly higher sales.

In fact, our company in Norway and Denmark experienced the best performance it had ever recorded. So, what is it that people want during the pandemic? “They want to have comforting food with local produce, and something familiar in times of uncertainty,” he enthuses on some of the developing trends across the business. He says that a sense of nostalgia remains a key driving force for the company, which despite the volatile nature of conditions, has produced some encouraging glimmers of hope.

After two years in his present post, he adds he’s greatly enjoying steering the company forward as it plots its continued upward trajectory amid a crowded marketplace. While he notes the many challenges spanning logistics, safety and supply chain issues, they were able to turn conditions to their advantage in refining their offers to customers.

According to Staņēvičs, he explains that while expanding in Europe remains a major goal, its product development continues with consideration for what they believe works best locally. “We see ourselves as innovators of flavours and market channels and delivering convenience consumption with over 100 launches, which is a big number. It’s only been possible as we have our unified research and development centre here in Riga, and we’ve invested a lot in R&D across the business,” he adds.

This led to the creation of some pretty inventive flavours such as double chocolate ice-cream with potato chip flavours in Norway. Clearly, he notes that keeping up with the pack in terms of global trends such as delivering smaller portions, snackification and sugar reduction are also key considerations, while understanding there’s not a one-size fits all solution for its diverse ranges. With the company enjoying comparatively buoyant fortunes as it continues to expand its portfolio, its forward momentum is set to carry on well into 2021 and beyond.

Related content

Leave a reply

Confectionery Production