Key trends driving dairy and how manufacturers can innovate for success

What Food & Beverage products are appealing to consumers right now?​

Now more than ever, consumers are turning to all-encompassing and holistic approaches for their overall wellbeing. Since the pandemic, consumers have placed heightened importance on getting access to nutrition that best supports their overall health. Products that incorporate functional ingredients – for example, those that can help to improve mood, mental state or cognitive performance – as well as those that offer guilt-free indulgence are really resonating right now.

How does dairy fit into this space? ​

Dairy has become a product of choice for consumers who perceive it as being nutritious, and functional yogurt and dairy beverages are on the rise as consumers look to dairy for healthy nutrition. In the US, at least 72% of milk consumers believe that dairy has a positive impact on their health and wellbeing.¹​ We’re also seeing an increased callout in messaging and on-pack showcasing specific health benefits – for example, around areas such as immunity and bone, eye, or gut health. Sugar and salt reduction are also front of mind for consumers but dairy products are still a source of great taste experience and pleasure. At IFF we offer industry-leading solutions and an end-to-end portfolio of dairy ingredients range from fresh fermented yogurt cultures, cheese starter cultures and probiotics, to stabilizers, flavours and lactases.

What is IFF doing to help manufacturers stay one step ahead of the market? ​

IFF has in-depth understanding of the market trends and white spaces in the dairy industry. From these market trends and our uncommon insights, our technical teams design innovative concepts utilizing our broad portfolio of cultures, probiotics, enzymes, ingredients, and flavours to open new markets and elevate consumer’s consumption experience.

How do you see consumer needs around dairy evolving?​

PANOPTIC is IFF’s proprietary trend and foresight capability that identifies impactful shifts and dynamics shaping the future of the food and beverage industry. It inspires and drives future-proof creation and strategic innovation by understanding the most influential trends of today and tomorrow. In terms of the future of the dairy industry, our insights have highlighted four key lifestyle trends that must be considered when looking at new product design, development or innovation: 

• Omnipresent health and wellbeing​ Consumers want to live a healthier lifestyle. 
• Planet-first​ Consumers are making more conscious choices about what they eat, what their food contains and where it comes from. 
• Critical and ethical​ Consumers are concerned about how companies behave beyond the products that they sell.
• Experience amplified​ Consumers still want products to feel like an indulgence, to provide enjoyment, enabling them to experience new tastes and textures.  

What opportunities and challenges will this mean for manufacturers? ​

In order to continue innovating and providing dairy solutions, we’ll need to ensure that we’re considering all these ever-evolving need states. We know that, while consumers are keen to make healthier choices, they are unwilling to compromise on the sensory experience. 

Taste is still a key differentiator in dairy, and this is one area where consumer expectations present dairy manufacturers with an increasingly complex challenge: how do you produce delicious dairy products that are low in sugar and high in fibre, while containing a minimal amount of lactose? This is rooted in the growing demand for healthier products that support general wellbeing.

As an example, IFF’s NURICA™ is a lactase with a difference. Our innovative enzyme supports dairy manufacturers to transform the natural sugars of the milk into GOS (Galacto-oligosaccharides), thereby enhancing its nutritional profile.

Do you expect plant-based dairy to keep growing?​

Consumers are increasingly seeking guilt-free indulgence with functional health benefits. While many seek ways to integrate plant-based dairy into their diets, expectations surrounding product taste and texture remain high.

At IFF we have an extensive portfolio for plant-based products, supporting these demands by mimicking the taste and texture of traditional dairy. Our portfolio includes a variety of cultures suitable for different matrix based (pea, soy, coconut, etc), protective cultures, probiotics and enzymes.  

With a range of use cases for dairy, taste innovation is increasing in importance for consumers. Brands have an opportunity to creatively use ingredients and flavours to cater to the shifting palates of consumers, including by creating products for different times of day and for different occasions.

And as taste continues to be a determining factor driving the purchasing decision, the importance of leveraging flavours to mask off-notes and enhance taste is key in plant-based alternatives. We have lots of solutions for plant-based dairy, too.

Tell us more…​

We launched VERSILK™, an effective way to improve viscosity and texture in plant-based yogurts. We also offer a broad portfolio of Danisco® VEGE cultures that are specially formulated for a wide variety of plant-based fermented products. We’re also committed to continued investment in next-generation starter culture development and technology, developing tools to improve the fitness of strains for plant-based products. 

We have developed a full range of cultures to help customers exceed consumer expectations. These include HOLDBAC® YM VEGE which are protective cultures that offer a label-friendly portfolio of solutions that also support the reduction of food waste. Our HOWARU® Probiotic Cultures help meet the demand for products providing a wellness benefit.

Besides flavour, what other factors are driving purchases in dairy? ​

We’re seeing a real element of excitement, fun and joy within the dairy space. Consumers are showing an interest in brands that provide an escape via different aspects of the sensory adventure. Take ice cream, for example. This is a category where consumers are open to experimenting with new flavour combinations. Taste and texture are vital to retain a feeling of luxury, even in healthier options such as reduced sugar products.

Our Taste Design™ approach can help manufacturers create enriching sensorial experiences. For example, the FLAVORFIT™ provides an excellent sweetness profile and a creamy taste perception, even in healthier products that are low in sugar and fat.

In fact, our new CREMODAN® GREENPRO 101 Modulator Enhanced System is specially designed to enable ice cream manufacturers to churn out premium quality ice creams at affordable rates. It is a blend of ice cream stabilizer system and flavor modulating technology; that maintains the indulgent quality in terms of taste and mouthfeel of the ice cream.

What other challenges are dairy manufacturers facing?​

Consumer habits and preferences are continuously evolving, meaning manufacturers need to cater to the increasingly diverse demands of consumers across the globe. An example where IFF can help here is with our YO-MIX® PRIME, which we developed to serve as a toolbox for dairy processors seeking to meet and exceed regional premiumization expectations.

Due to its low post acidification characteristics, it allows producers to expand distribution reach while delivering a premium taste experience until the end of shelf-life. Another product we offer is HOLDBAC®, a cutting-edge consumer-friendly bioprotective culture for extended freshness in fresh dairy and cheese, that enables manufacturers to play a role in reducing food waste by keeping products fresher for longer.  

How can manufacturers cater for a variety of global tastes that meet specific needs?  ​

At IFF, product design and innovation are at the heart of what we do. IFF Product Design™ is dedicated to delivering end-to-end product innovation, from concept to consumer. Our innovative approach combines advanced insights, recipe design, and taste expertise to meet and exceed consumers’ expectations, wherever they are in the world.

By designing products based on the specific needs of our customer – and their consumer – we are able to leverage our extensive industry-leading product portfolio and expertise to become an essential partner for the next generation of food and beverages. 

For example, our YO-MIX® range of fresh dairy cultures and probiotics, including YO-MIX® PRIME, helps to meet the diversity of consumer preferences as well as industry demands in the fresh fermented dairy industry. And we have a very broad portfolio of probiotics addressing a range of specific consumer needs from digestive and immune health to weight management, as part of our HOWARU® range of probiotics. We enable dairy customers to incorporate the benefits of these in a variety of fermented dairy products. 

Through our IFF Product Design™ approach, we can offer unrivalled expertise and a portfolio our customers need to create industry-leading dairy products that meet evolving trends. Product development and application expertise ensures a dedicated team of dairy experts creating customized solutions for every customer’s unique needs.

How big is sustainability in shaping dairy innovations?​

Our data shows that consumers seek products that provide choices on sustainability and those which help them to make a positive impact on the environment. Packaging is a big one here and definitely an area where manufacturers can respond and make changes. For example, ensuring that packaging is easier to recycle, or by using less material overall. Upcycling, renewable energy sources and regenerative farming are also trending.

In a world where resource availability and affordability are posing bigger challenges, dairy producers will need to leverage cultures and enzymes to deliver cost-efficient, high-quality, healthier, label friendly and sustainable dairy products.

How is IFF helping to address customers’ sustainability concerns?​

We factor sustainability into all our product development. This amplifies our positive impact on both people and the planet – innovating to support the wider impact on the dairy industry is an integral part of what we do.

We have extensive expertise in microbial diversity and biotechnology to develop solutions that reduce food waste by keeping food fresher for longer and support less water- and energy-intensive production and supply chain logistics.

Another benefit of this is that because we are considering yield and cost when it comes to manufacturing, these innovations also help our customers create more affordable products. In the ice cream category, for example, this is a focus for our innovation pipeline. It’s a double win as such advances are underpinned by a commitment to support the industry in becoming more sustainable and in helping to make the world a better place.

Another initiative we are passionate about is addressing the challenge of waste through upcycling into value added products. IFF’s zero-waste philosophy is dedicated to creatively using by-products from typically discarded side streams, tapping into their highest value and improving the way we use resources. Across our business, we are reassessing applications for side-stream materials from manufacturing processes, conducting food waste-reduction pilot projects, commercializing new upcycled ingredients and further developing our pipeline of potential new opportunities.

Our digitally traceable Vanilla partnership, with LMR and partners, guarantees a fully transparent supply chain of our vanilla from seed to bottle. It improves the transparency of the vanilla supply chain in Madagascar – one of the richest biodiversity in the world – and provides jobs and education for sustainable environmental and social practices to vanilla cultivation.

As an associate member of the Upcycled Food Association (UFA), in 2022 we announced the first wave of ten IFF products that achieved verification from UFA’s Upcycled Certified™ Program – the world’s first third-party certification for upcycled food ingredients and products. ​

References​

1.​ Kantar / Mintel (April 2022).