Dairy Drinks Driving the European Dairy Market

Fortified dairy drinks are strong in Europe.

There was a time when dairy drinks came in three varieties: skimmed, semi-skimmed, and full-cream.

Today, while milk represents the second largest segment of the global dairy market in value terms, in the western world it is premium-priced, added-value drinks-often with built-in health benefits-that are driving growth in liquid dairy products.

“The most innovative functional dairy products are fortified flavored milks, yogurts, and drinking yogurts,” says Doug Brown, global marketing manager for dairy with DSM Nutritional Products (Basel, Switzerland). “Products such as yogurts enriched with vitamin D3 and calcium, flavored milk drinks with omega-3 fatty acids, as well as U.S.-style dairy ‘smoothie’ blends fortified with B-group vitamins are all well received by consumers.”

It’s not just western Europe, either, that is interested in functional dairy drinks, according to Brown: “Eastern Europe offers dairy manufacturers great growth potential in terms of new product development and innovation within established product categories. Although initially this geographical region showed less demand for functional dairy products, it has now become a significant force, accounting for a growing share of the European dairy market.”

Probiotics: Past Their “Sell By” Date?

Probiotics have been the big success story in functional dairy drinks so far, spearheaded by the likes of Danone, Yakult Honsha, and Valio.

Leatherhead Food Research’s June 2011 report, Future Directions for the Global Functional Foods Market, valued the global market for probiotic yogurt drinks at USD$2.75 billion in 2010, up from very modest levels a decade ago.

“Sales of both food and drinks on a gut health platform, particularly probiotic-containing drinks, are experiencing strong growth,” says Mia Naprta, market analyst with Leatherhead.

Within Europe, the report ranks Spain, Germany, and the UK as the largest markets for probiotic yogurt drinks, worth USD$700 million, USD$515 million, and USD$500 million, respectively.

The report does, however, suggest that there are signs that growth is starting to stagnate. In the UK, for example, Mars withdrew its Galaxy probiotic shot drink late in 2010, barely a year after its launch, following disappointing sales.

This doesn’t mean that the probiotic bubble has burst, though. As Sarita Bairoliya, global marketing manager, probiotics, Chr. Hansen (Hørsholm, Denmark), points out: “If you look at the data, gut health is still the main trend in this market, and that isn’t going to change overnight.”

But as evidence builds for the immunity-enhancing benefits of some probiotic strains, it could be that the time is ripe for expanding probiotic dairy drinks beyond digestive health.

“Gut health is the most credible area for probiotics, but the immune-supporting effects are becoming more established,” says Bairoliya.

Of course, a major obstacle to the future development of probiotic dairy drinks is that the European Food Safety Authority (EFSA) has yet to approve a probiotic health claim.

Chr. Hansen is doing everything in its power to change EFSA’s mind about probiotics through heavy investment in clinical trial programs for both its BB-12 gut health and L. casei 431 immunity strains.

A pharmaceutical-style trial for L. casei 431 is expected to complete in 2012. Involving over 1,000 participants, the trial is one of the largest to use an influenza vaccination model to determine the probiotic’s effectiveness in battling influenza and other viral respiratory tract infections.

Dairy Cultures: Getting Specific

Using specific cultures can also help dairy producers respond to other consumer trends and concerns, such as demands for reduced sugar and fat and cleaner labels.

At the Food Ingredients Europe trade show last year, Chr. Hansen showed a kids’ drinking yogurt which contained 5% added sugar versus the market standard of 10%. This reduction was achieved via the company’s Yoflex and probiotic Nu-trish cultures, which were specifically developed for drinking yogurt.

Bairoliya says the key to reducing sugar in yogurt drinks is to use milder strains. “That means the yogurt is not as acidic, so you don’t need to add as much sugar.”

She adds that smooth, clean-label, low-fat yogurt drinks can be created through the use of cultures that have a thickening effect. “If the culture can deliver a thickening effect, you might be able to eliminate starch from the label-in many consumers’ minds, it looks odd to see ‘potato starch’ on a yogurt drink label.”

Work on cultures is also underway at Dutch food research firm NIZO, which has propagated a plant isolate strain of Lactococcus lactis, potentially opening up opportunities for developing dairy products with new functionalities.

NIZO says that lactococci isolated from plants are more versatile than dairy lactococci and therefore have good potential to provide dairy products with new functionalities. However, because they don’t always grow well in milk, currently plant lactococci are rarely considered for industrial applications.

NIZO scientists evolved an L. lactis plant isolate by propagating the strain in milk for 1,000 generations (five months). Characterization of the evolved strains showed an increase in growth and acidification rates, biomass yield, and improved fitness in milk versus dairy isolates.

“This opens up new opportunities by making plant isolates with interesting functional properties suitable for industrial applications,” says NIZO’s Dr. Herwig Bachmann. “Next steps could be to steer this evolution towards desired traits such as probiotic properties and flavor, better survival after drying, or production of certain vitamins, by changing the experimental setup.”

Dairy Drinks: Breaking into Bone Health

Not everyone agrees that probiotics are the most successful functional dairy drinks platform.

“In our experience, the most successful functional dairy drinks platform is bone health because this health concern resonates with consumers of all ages: from growing bones in the young to deteriorating bone tissue in older generations,” says DSM’s Brown.

He is supported in this view by Leatherhead, whose research has found bone health to be the leading health claim for many functional milks, although it says the sector remains considerably smaller and less developed than gut health.

Within the yogurt drinks category, in 2010 Danone launched products on a bone health platform in Italy. Calcium-enriched lines also feature quite strongly in Spain, accounting for about 63% of the country’s functional milk market, according to Leatherhead.

The most important nutrients for maximizing bone tissue are calcium and vitamin D, with protein, phosphorus, zinc, magnesium, and vitamin K contributing as well, says DSM. However, it warns that calcium should never be taken in isolation, as vitamin D3 facilitates absorption.

Following an application from DSM, EFSA has approved a health claim for vitamin D under Article 14, stating that it significantly reduces the incidence of falls and fractures. “It is well documented that weak bones and osteoporosis are the leading causes of falls in elderly, and a scientific substantiation from EFSA will help the industry to tap into this consumer health need,” says Brown.

Dairy Drinks: Marketing to Seniors

Seniors represent a receptive target audience for bone-health drinks, and possibly for other functional dairy drinks, too.

“Healthy aging is one of the most promising platforms for functional dairy drinks,” says Koert Liekelema, managing director of Fonterra Europe (Amsterdam). “Aging is associated with less mobility due to a decline in muscle mass and function (sarcopenia). The loss of muscle mass appears to begin relatively early (20 to 30 years of age), and continues until the end of life.”

Another ingredient manufacturer that sees the senior market as an untapped opportunity for dairy drinks is Glanbia Nutritionals (Brussels). Paul Kollesoff, business development manager with Glanbia, says: “The 50+ market not only has the disposable income, but they are the target market for which the amino acids (such as leucine) from dairy protein have great benefit. ‘One a day’ dairy beverages available in mainstream retail outlets would answer this need. At the moment, this market segment either needs to consume supplements or take clinical nutrition products, neither of which are as desirable as a good-tasting dairy drink.”

It’s no coincidence that both Fonterra and Glanbia are active in protein, which plays an important role in muscle maintenance and preventing sarcopenia.

Fonterra’s solutions include ElevateProtein for increasing the protein content of yogurt drinks, and SureProtein for milky beverages.

Glanbia’s Provon A190 and AS500 whey protein ingredients, meanwhile, are said to offer industry-leading stability and taste in beverage systems.

Glanbia also markets amino acid peptides under the patent-pending PepForm banner.

“Where amino acids are difficult to work with, PepForm products improve solubility of bioactive components and are easy to formulate and great tasting, but are also more efficacious than their ‘straight’ amino acid counterparts,” says Kollesoff.

Dairy Protein: Not Just for Pros

Opportunities for developing protein-enriched dairy drinks are by no means limited to the senior market. The sports nutrition category, long considered the preserve of body builders and serious athletes, is now becoming more mainstream, according to Fonterra. Here, the company says there are still opportunities to improve ready-to-drink sport shakes with regard to taste and viscosity. Glanbia Nutritionals’ Kollesoff has more radical suggestions for expanding the sports nutrition category: high-protein dairy shots.

“At the moment, many of the high-protein shots are collagen based; however, the sports market loves whey protein. If whey protein could be made stable at a more concentrated level in a drinkable shot, this could have great benefits for the sports nutrition market. The ultimate in convenience for the busy gym enthusiast, maybe?”

While protein’s role in sports nutrition products is widely acknowledged, its contribution to cognitive performance is less high profile. However, Arla Food Ingredients (Viby J, Denmark) sees this as a lucrative potential platform for dairy drinks, alongside weight management and sarcopenia.

The company’s Lacprodan PL-20, a milk protein rich in phospholipids from milk, is claimed to support cognitive performance by boosting working memory and reducing stress.

Omega-3 for Dairy: Out of Favor?

It would be difficult to write about functional dairy drinks without mentioning omega-3, which has featured in a number of dairy beverage concepts in recent years.

On the face of it, omega-3 is the perfect dairy drink ingredient. DHA omega-3 has an EFSA-approved brain development claim, and thanks to microencapsulation technology, issues with fishy tastes and odors are in the past.

UK-headquartered Croda Health Care, for example, has developed a microencapsulated high-DHA fish oil emulsion called Omelife Smooth DHA500, which looks like milk and is said to easily blend into dairy-based drinks, withstanding homogenization and pasteurization. It has been used in citrus-flavored yogurt drinks, delivering over 250 mg of EPA and DHA in a single serve (meeting EFSA’s EU dietary reference value).

However, omega-3 fortification hasn’t taken off to the same extent as probiotics; in fact, Leatherhead goes as far as saying that “it has been apparent over the last couple of years that growth within the market for food and drinks with omega-3 fatty acids has not lived up to initial expectations.”

In support of this, it notes that omega-3 fatty acids were removed from the Müller Vitality range of yogurt drinks in the UK, with the manufacturer claiming that this additional functional health ingredient was causing confusion among consumers.

David Jopling, businesss development manager, functional foods, with Croda Health Care, gives two plausible explanations for why this market has failed to take off: the recession and the absence of investment by the major players.

“[Recent] years have seen the worst recession in over 70 years, with new launches of value-added foods and beverages taking a backseat. Although many dairy drink manufacturers have looked at and developed omega-3–enhanced products, the recession has been the main reason for holding back on new product launches.”

Looking Forward

But not all functional ingredients are suffering from underinvestment in R&D by manufacturers as a result of the recession.

UK-based Volac reports that demand for its Volactive Ultra Whey protein products is growing so strongly that it has had to invest significantly to keep up.

“We have expanded our processing capacity and continue to develop strategic partnerships within the dairy industry,” says Mark Neville, head of lifestyle ingredients.

He believes that rather than stifling innovation, the recession is causing dairy manufacturers to stick with tried-and-tested ingredients rather than experimenting with new ones.

“As people tighten their belts, the need for demonstrable benefits will become ever more important. Those ingredients that have a wealth of science and advocates behind them will surely find it easier to succeed than new ingredients.”

And he believes whey protein has what it takes to win over more discerning consumers. “Just consider the potential nutritional value of a milk-based beverage fortified with whey protein: the milk provides a significant source of calcium and other minerals, plus you’ve got an easily absorbable protein with one of the greatest nutritional values and high amounts of essential amino acids.”

This is certainly one “whey” to go, but future development doesn’t lie with any single ingredient but rather in targeting specific consumer groups with health benefits that are most important to them, whether that be bone health, gut health, or muscle maintenance.

This article first appeared in Nutritional Outlook’s sister publication, International Food Ingredients magazine. IFI magazine is the authoritative European publication on the food ingredients market. Visit www.ingredientsnetwork.com.