Zenith research eyes major dairy snacking potential

By Guy Montague-Jones

- Last updated on GMT

Related tags Pepsico

Zenith International has published a report on the dairy snacks market revealing high global sales growth and predicting significant opportunities for further expansion.

According to the research, sales of dairy snacks, which include products like cheese strings and yoghurt tubes, grew 7 per cent in 2009 and are heading for a 6 per cent rise this year.

Growth potential

This growth is expected to continue as manufacturers look to dairy as an avenue of developing healthy, convenient snacks. Zenith said total volumes are expected to grow from an estimated 217,000 tonnes in 2010 to reach over 260,000 tonnes by 2014.

Zenith market analyst Laura Knight “As modern on-the-go lifestyles have left consumers time poor, many people are increasingly looking for a convenient snack that delivers on health and nutrition, also one that tastes good and provides a pleasurable eating experience.

“Dairy snacks are well placed to meet these consumer demands and manufacturers have begun to capitalise on the opportunity this presents.”

Some big manufacturers have well established brands in the segment including Bel with Mini Babybel and Kraft with Dairylea, but these could be joined by new entrants as food manufacturers look for new opportunities.

PepsiCo entrance

PepsiCo, for example, has indicated that it sees strong potential in dairy snacks. Having announced last week its intention to buy Wimm-Bill-Dann Foods in a $5.4bn deal, the company is poised to turn promises into action.

In a statement announcing the acquisition on Thursday, PepsiCo chairman and CEO Indra Nooyi said: “Dairy has a huge, untapped potential to bridge snacks and beverages. We see the emerging opportunity to ‘snackify’ beverages and ‘drinkify’ snacks as the next frontier in food and beverage convenience.”

In geographic terms, the US dominates the world market for dairy snacks, accounting for almost two thirds of global volumes but other countries including the UK, France, Canada, Germany and Japan also have developed dairy snack markets. But Zenith said there is still room to grow in all these countries and there are significant opportunities to be had in other emerging markets in Eastern Europe and Latin America.

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