Yoghurt drink makers wary of soft drink challenge

By Neil Merrett

- Last updated on GMT

Related tags Milk Kefir

As drink manufacturers strive to provide innovative functional products to increasingly health focused consumers, dairy goods such as yoghurt may be an emerging route able to help bridge demand.

However, some dairy manufacturers believe that positioning products such as yoghurts and other dairy-based beverages towards the soft drinks market may actually prove counter productive to a current industry drive towards health.

Health focus

Arla Foods, a Scandinavia-based cooperative, told DairyReporter.com that it has been marketing and selling yoghurt drinks for just under a decade and was seeing growing interest in such products.

“At the beginning it was a limited segment, however, we have been fuelling great growth in the segment for many years,” ​said a spokesperson for the company.

The company claimed that its yoghurt drink products, which contain cultures designed to offer nutrition benefits to a consumer, have been distinctly sold as health products and not as a direct alternative to soft drinks.

“Arla stands for naturally healthy dairy products and therefore ‘soft drinks’ is not an area we are striving for,”​ said the spokesperson. “Drinking yoghurts and other milk based healthy and tasty drinks is something we intend to continue to be at the leading edge of.”

Soft drink potential

At a time when manufacturers such as Pepsi have moved ahead to launch yoghurt flavoured drinks in certain markets like Japan – albeit it dairy free – similar beverages may be a major area of growth for producers.

The Arla spokesperson added that there is a strong global trend for drinks makers to find natural and healthier alternatives to existing beverages, particularly like carbonated brands.

Amidst this shifting consumer demand, Arla claimed that milk and other products derived from the liquid can potentially be sold as a ‘superfood’.

In terms of the potential competition from soft drink makers looking to make better use of milk and even yoghurt in their brands then, Arla said it was encouraged by a growing focus across the food and beverage industry for such products.

Innovation challenges

Jim Begg, director general of industry body Dairy UK also cautiously backed growing interest in yoghurt drinks, though hoped that any developments would not prove detrimental to the nutrition image of the beverages.

Begg stressed that besides these concerns, product innovation and competition was a key factor in ensuring the dairy industry can continue to meet consumer needs for added-value products.

“In the UK, we already have a huge range of compelling brands and own-label products,”​ he stated. “I would hope that new entrants to the market are not simply trying to piggy back on dairy’s healthy image for the benefit of their brands."

Functional push

Whether dairy does prove to be the future of functional beverages or not, the health and nutrition developments across the wider beverage market appear set to continue.

Between 2002 and 2007, the market for functional beverages grew by about 30 percent, according to a Mintel report released last year. The growth was contributed mainly to a sharp increase in functional water demand.

Nonetheless, other findings by analyst Zenith International suggests that milk-based drinks were becoming increasingly prevalent in the beverage market.

“In order to meet growing competition from other drinks, particularly in developed countries, producers have increasingly focused on adding functionality - in one year, over 2,300 new functional dairy drinks were launched,”​ the analyst stated. “Although functional milk drinks are still a niche segment, volumes are growing fast.”

The first part of this article can be found here​.

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