Convenience, flavours and healthy-living drive growth of drinking yogurt market

Yogurt is a tart, custard like food made from milk curdled by the action of bacterial cultures thus considered as the best source of probiotics. It has been consumed by humans for hundreds of years mainly due to the health benefits associated with intake of probiotics such as improving gut functionality, metabolism, along with immunity boosting. In addition, yogurt is filled with proteins, packed with vitamins, and loaded with bone-building calcium and minerals. To this end health-conscious consumers including both adults and children have been the main drivers for rising demand of the product.

Further to that, growing consumers interest towards convenient foods has resulted in evolution of drinking yogurt. Drinking yogurt combines the nutritional benefits of the beverage with functionality and taste. Addressing the latter, drinking yogurt manufacturers have taken their flavour profiling a notch higher to meet the changing consumer taste and preference.

 Bursting with flavours

In the past, mainstream flavours such as plain, vanilla, strawberry, chocolate and other fruit flavours were the norm, but innovative processors are offering indulgent and appealing variants. To this end bold and unique flavours continue to gain popularity and grab consumers’ interest, especially among millennials. In addition, new drinkable yogurt flavours, such as the savoury flavours of vegetables – carrots, beetroot, and tomatoes have become popular among consumers.

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Take the case of Kenya’s Bio Food Products. The innovative dairy company in 2018 debuted its Bio Active Probiotic Yoghurt Drink, a range of delicious fruit yoghurt with real fruit that is available in three varieties: blackberry & raspberry, cucumber & mint, yuzu, apple & lemon and which the company says has all the good bacteria that boosts the immune system and assists in the digestion of food and improves the overall well-being.

Ethnic and artisanal flavour trends in other food products are jumping over to the dairy aisle as well. Baobab is relatively new on the scene and has shown up in yogurt. This fruit comes from a tree native to the African continent, Australia and Arabia, and is considered a super food that is recognized for its vitamins, minerals and immune health benefits.

Additional flavour profiles gaining popularity include toasted nuts, ginger, coconut, pomegranate, lavender, chai, rhubarb and even jalapeno for those with more adventurous taste buds.

As manufacturers seek new flavour combinations, throwing in a dose of health and wellness is also increasingly becoming the norm. According to a report by Mordor Intelligence, the yoghurt market has recently witnessed the launch of drinkable yogurt fortified with omega-3, collagen, aloe-vera, plant sterols, and soy isoflavones.

For instance, Morinaga Nutritional Foods Inc, an American manufacturer of dairy products launched a low-fat Japanese-style yogurt drink under its popular Alove brand in three flavors – original aloe-vera, strawberry banana and coconut in March 2018. During the period 2017-2018, aloe-vera based yogurt drinks witnessed a growth of over 30% in terms of new product launches in USA.

 Indulge while on the move

Coming in as a chariot of convenience, drinking yoghurt has set itself as a practical alternative to yogurt cups and spoons, as it comes in recloseable packs with a spout or are provided with a convenient drinking straw.

This makes it ideal for people on the move to consume it anywhere and anytime. Available in full, medium and low fat and high in protein it is a go-to option as a snack or meal replacement. This in turn has led to consumers to increasingly treat yogurt as an all-day food product instead of relegating it to breakfast hours, as had been the case before.

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According to Mintel, a global provider of research and market insights, approximately 93% of Americans who eat or drink yogurt have it at breakfast, however more consumers are choosing yogurt as an afternoon snack increasing to 84% in 2016 from 37% recorded in 2014.

“A growing acceptance of yogurt as a snack creates huge opportunity for the market. As a result, we’re seeing product innovation expand to include formats that fit non-breakfast occasions,” Beth Bloom, senior analyst of US food & drink at Mintel said.

These figures mirror more the situation in many sub-Saharan African countries, where yoghurt, while being appreciated as a breakfast food, is largely drank on the go, coming in as an important meal replacement and refreshing drink that is consumed throughout the day.

 Expanding market reach to growing vegan population

Moving away from the traditional use of dairy milk as a base for making yogurt, a significant shift has been witnessed with the rising production of non-dairy drinkable yogurt aimed to increase the market penetration, particularly among the growing vegan population.

Leading market players such as Danone and Chobani have introduced vegan yogurt drinks derived from almonds, soy, coconut, and other non-dairy sources over the last one year, as they innovate to fall in tune with rising consumer demand for plant based foods. Danone has an impressive variety of plant-based products including almond and coconut milks, to blends, coffee creamer and non-dairy yogurt alternatives, while Chobani Probiotic is a range of subtly bubbly fermented plant-based drinks, crafted with organic fruit juice, botanicals, and immunity-supporting probiotics, and which is available in lemon ginger, pineapple turmeric, peach mint and cherry hibiscus tea variants.

Other than catering to the growing demand for plant-based foods and beverages, Chobani recently launched Chobani Complete, which it refers to as an advanced nutrition with 20 amino acids and high in protein, lactose-free Greek yogurt drink with no added sugar – a welcome treat to consumers who are lactose intolerant and have been left out of the yogurt relishing party for far too long. “With every trip to the store, consumers are looking to do more than just fill their bellies. They want healthier foods and drinks to calm their minds, restore their bodies and replenish their energy,” stated Peter McGuinness, President of Chobani during the launch of the new brand.

 APAC to drive global drink yogurt market

Ticking all boxes of nutritious, convenient and sensory intense product, the global drinking yoghurt market is projected to grow at a CAGR of 4.8% during the forecast period 2020-2025, according to Mordor Intelligence. A report by Market Watch has further indicated that sales are expected to cross 17 million tonnes by 2023. In 2017 the market was valued at US$21.2 billion.

Asia-Pacific is the dominant market for drinkable yogurt globally, accounting for a market share of 40%, driven by the consumer awareness of probiotic products and supportive regulatory environment. The region is also deemed to be the pioneer of drinkable yogurt sales with the introduction of Yakult in Japan in 1935. Other than being the dominant market, it is also the fastest growing region witnessing a CAGR of 14.6%, with China and India leading the growth.

The second largest drinking yoghurt market worldwide is Europe accounting for 28% market share followed by North America with 21%, South America with 9% and Middle East & Africa with 6%. In Africa, the yogurt market is expected to record a CAGR of 5.1% during the forecast period 2020-2025, with South Africa featuring as the fastest growing market.

Some of the major players spreading awareness and promoting consumption of drinkable yogurt in the region include Yakult, Danone, FrieslandCampina, Nestle, and Chobani. Local players have also ventured into the sector with the likes of Sotibe Nigeria Limited, a West African dairy company offering its Dolait drink yoghurt in Cameroon, Benin Republic and Nigeria. In East Africa, Kenyan specialty dairy company all the major dairies offer various forms of drinking yoghurt including Bio Food Products, Brookside, New KCC, Githunguri etc.

Globally, other than the already cited Morinaga, Yakult, Danone, FrieslandCampina, Nestle and Chobani, other key players in the market include Gujarat Cooperative Milk Marketing Federation Ltd, Mother Dairy Foods Processing Limited, DANA Dairy Group LTD, Groupe Lactalis, Pillars Yogurt, among many others.

A growing acceptance of yogurt as a snack creates huge opportunity for the market. As a result, we’re seeing product innovation expand to include formats that fit non-breakfast occasions

Beth Bloom, senior analyst of US food & drink at Mintel Tweet

Innovations driven by suppliers

Drinking yoghurt’s convenience and health benefits will continue to resonate with consumers in the future. However, manufacturers will need to pre-empt future headwinds and continue adding value to their assortments.

For instance, consumers are seeking more healthy and natural ingredients in drinkable yogurts, such as stevia, instead of bulk sweeteners to reduce calories. Confirming yogurt’s double-sided nature, next to health claims and sugar reduction, brands also have a chance to thrive by exploring indulgence through proper texture, which goes hand in hand with flavouring, providing the ultimate consumer experience.

To solve these and many other problems, players like DuPont Nutrition & Biosciences (DuPont), a Danish bio-based company, has been launching a series of dairy cultures and probiotic formulations, offering yogurt producers new solutions for differentiation, positioning them for future growth.

Other than DuPont, processing and packaging solution provider, Tetra Pak has also been on the forefront to drive growth in the market. In 2010 the multinational company partnered with a major Chinese dairy, Bright Dairy to launch the first Ambient Drinking Yoghurt (ADY) worldwide, under the brand name Mosili’an.  ADY is the long shelf-life version of yogurt, taken through an important heat treatment step that allows the product to be stored for months at room temperatures without changing taste, mouth-feel or nutritional value.

Since the launch of the game-changing innovative product, the trend has seen more dairy producers entering the market with Tetra Pak processing lines. According to the company, while global production volumes of most yoghurt types grew at a compound annual growth rate (CAGR) of 4% during the period 2013-2016, ambient yoghurt production grew at a CAGR of 19% in the same period. In 2018, Tetra Pak took the innovation to the next level when it partnered with Yili to produce world’s first Ambient Drinking Yoghurts (ADY) with large fruit and cereal pieces.

The phenomenon has grown beyond its birth-place China, setting its foot prints in African countries like Nigeria with Chi Limited launching the Gogurt pack, under the Hollandia Yoghurt brand and Fan Milk Limited in Ghana introducing FanMaxx.

Furthering innovation in the ambient drinking yogurt segment, Arla Foods Ingredients in May 2020, launched a new clean-label yogurt concept with its Nutrilac YO-4575 whey protein that it says meets Chinese demand for ambient yogurt. Initially created to increase creamy mouthfeel in high-viscosity fermented products such as skyr, Arla claims Nutrilac YO-4575 has heat-stability and texturizing properties.

 Investments increase

Investments, expansions, mergers and acquisitions, and partnership are common strategies in the industry aimed to boost the market. Nigeria’s FrieslandCampina WAMCO, the subsidiary of Holland’s Royal FrieslandCampina, recently commissioned an ultra-modern Ready to Drink (RTD) factory worth US$27.5 million for the local production of its Peak Yoghurt drink.

The opening of the state-of-the-art facility is linked to the successful implementation of the company’s dairy development programme in the country, which recorded an increase in fresh milk collection from farmers to hit an all-time high record of 40,000 litres of milk per day. This will ensure the factory has ample raw material for processing.

The drinkable yogurt market is highly competitive in nature with both domestic and multinational players competing for market share and placing innovation as one of their major strategy of being leaders in their respective markets. The end winners are the consumers fashioned with products that satisfactorily meet their demands.

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