Dairy Crest plans omega-3 spread launch

By Chris Mercer

- Last updated on GMT

Related tags: Dairy crest, Nutrition

Functional spreads are increasingly holding up value on the UK
margarine sector, says new research, as Dairy Crest plans to launch
a new range containing omega-3.

Dairy Crest, one of Britain's top three dairy processors, is planning to launch a new spread enriched with omega-3 fatty acids under its St Ivel Gold Brand.

A dairy industry analyst told www.DairyReporter.com​ that the launch was planned for early next year, as part of Dairy Crest's drive to increase its presence in added value and functional foods.

He said Dairy Crest's added value business would likely grow by 15-20 per cent over the next couple of years.

Around two thirds of the group's business already comes from such products; an area increasingly in demand as the dairy industry looks to increase earnings.

The move into omega-3 spreads follows Dairy Crest's launch of St Ivel Advance omega-3 milk earlier this year, and comes as functional products begin to lead Britain's margarine sector forward.

Claire Birks, market analyst at Mintel​, said these products were growing alongside low-fat and olive oil spreads, despite a declining margarine sector.

She said functional spreads were a good way to go as consumers traded up for health.

Cholesterol-lowering health claims have so far led functional spreads, with strong growth for the Benecol and Flora Pro Activ brands. Dairy Crest's new launch is expected to continue this heart health trend, despite its omega-3 milk claiming to improve consumers' mental concentration.

Functional spreads are forecast to make up £81m of the projected £883m yellow fats market in the UK this year, according to Mintel​ data.

Healthy spreads, not including functional varieties, accounted for £212m of the £849m yellow fats market in 2004.

A new report from Datamonitor​ said sales of functional food and drink were rising across all product categories, with European and US nutraceuticals markets expected to reach €5.9bn ($7bn) and €21.3bn ($25bn) respectively by 2009.

Yet, consumer confidence may be a problem. Around half of European and US consumers distrust manufacturer's health claims, says Datamonitor, increasing the importance of scientific proof when marketing a new product with specific health claims.

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