Launching a new product can be a powerful growth strategy – but recent analysis from Euromonitor International shines a bearish light on the segment, showing that a significant share of new launches across dairy and dairy alternatives never make it past the first year.
Why do some dairy products flourish while others fail? According to Egle Tekutyte, senior consultant for innovation at Euromonitor International, the first three months after launch are critical.
“Initial purchases are made due to the excitement of finding something new. However, the share of repurchase later on will prove novelty success.”
“Finding your core target group and communicating product unique selling points helps build a solid starting point, nevertheless, dairy products and alternatives may prove to be more challenging than others,” she added.
This is because consumer habits are deeply ingrained in this sector. Tekutye highlights that dairy is a quite traditional industry where each consumer has their own preferences, often linked to tastes and textures they grew up with. As a result, “products that stray too far from the familiar can struggle to achieve long-term traction,” she said.
Euromonitor’s tracking shows just how high the stakes are.
Out of new yogurt and sour milk product launches during 2023-24, 23% had disappeared from online retail listings by the end of that period.
To mitigate against the worst outcome, brands must think in baby steps rather than more radical reinvention. As Euromonitor Consultant for Food & Nutrition Rasa Vaiciuniene told us: “Innovation success is usually linked to small changes to traditional recipes with addition of new flavours, fortification or functional ingredients.”
Much can be ascribed to how trusted the brand behind the product is. New brand launches had a higher failure rate of 38%, while line extensions from established brands failed at a lower rate of 32%.
Euromonitor’s Tekutyte says this contrast “is even more pronounced in plant-based dairy; new brand launches had a failure rate of 44%, compared to 33% for sub-brands.”
What success looks like
Successful dairy and alt-dairy launches set themselves apart by aligning with consumer expectations. According to Euromonitor’s Voice of Industry Survey, 55% of F&B professionals cite better consumer alignment as a top priority for NPD.
Health-forward claims are also a driving force. Among 2024 plant-based dairy launches, claims such as ‘good source of minerals’, ‘good source of vitamins’ and ‘high protein’ were the most prominent. In the yogurt and sour milk category, ‘probiotic’ and ‘high protein’ claims trended in 2024.
And taste, of course, remains king. “26% of consumers prioritise taste over nutrition, and 35% actively seek new flavors,” said Euromonitor’s Vaiciuniene. “More than 70% of new yoghurt and sour milk launches in 2024 were flavored, with strawberry and vanilla being the most prevalent.”
Where does the sector go from here?
Despite the challenges, the dairy and alt dairy is buzzing with activity. In 2024, more than 620 new products were launched in the yogurt and sour milk category, with 96% being sub-brands or line extensions. The plant-based dairy segment also showed robust growth with over 350 new product introductions, 90% of them under existing brands.
Consumer appetite for plant-based options continues to rise, with the segment forecast for a 7% CAGR in retail value from 2025-29, compared to 5.5% in the overall dairy category.
Regionally, the US leads in plant-based launches (15% in 2024), while the US and Italy topped yoghurt and sour milk innovation (12% each). North America sees more activity in convenient, on-the-go formats, while Europe is leading in gut health and functional dairy.
Go glocal
Even with the right ingredients, many launches stumble by assuming global trends will translate locally.
“Many producers focus on their core market, nevertheless some fall victim to global viral trends,” said Vaiciuniene. “Innovation should always address the needs of the intended market.”
That means getting granular. “Flavor combinations, functional ingredients, packaging type, fat percentage vary market to market and in some cases even differ within the same country depending on the region or generation,” she added.
Ultimately, it’s about focus.
“It is pivotal for any producer to remember that no product will satisfy the needs of 100% of shoppers,” said Tekutyte. “Finding the right consumer base and catering to their specific health concerns, flavor profile or lifestyle will always be a launching pad to product success and longevity in the market.”
