Forget about the hare - until recently liquid milk couldn't even keep up with the tortoise when it came to new product development. While cheese has spawned numerous varieties and yoghurts have gone pre-, pro- and symbiotic, milk was happy to stay on the sidelines. That is, until the introduction of value-added milks forced the white stuff kicking and screaming into the twenty-first century.
"New product development (NPD) in cheese and other dairy products has had a knock on effect," cites Robert Wiseman's NPD manager Elizabeth Adams.
"For many years there were just strawberry, chocolate and banana flavoured milks, but cranberries are growing more popular. A cranberry flavoured milk could be out there next," she says. "Ocean Spray did a lot of work bringing it into the public domain - and consumer acceptance is growing."
Flavour behaviour
Wiseman already produces two flavours of milk for the school market and is currently revising sugar content and looking into adding vitamins. "We try to use natural fruit sweeteners and natural colours," she says. "We have a flavoured milk with vitamins under the Tesco brand and the recent change in school meals legislation means there is a long-term possibility for vending similar products under the Robert Wiseman brand."
Milk Link is also targeting school children with Mini Moos (pictured) - flavoured milks containing over 30% of the recommended daily allowance (RDA) for calcium and 40% of the RDA for vitamin B12. Mini Moos should be a hit in vending machines as lots of carbonated drinks have been removed, says Milk Link category marketing manager Alli Lucy.
"A key focus area of Mini Moos is the use of sucralose, which means no tooth decay issues; and milk's natural lactose sugar, which is much less than [the amount in] Ribena," she says. The drinks have proved so popular that the company is launching a new confectionery-based flavour to meet consumer demand.
Lucy believes that, without extra flavours and ingredients, milk would be viewed simply as an accompaniment to other foods. Adding ingredients to milk encourages people to drink it throughout the day, she says. "At the moment, people don't view it as a product that can be drunk on its own."
There is also an opportunity for the adult market, she adds. "We've done research as to where milk sits in the market. It is seen as a bedtime drink and a morning drink and viewed as a filling capacity, not as a health drink."
Arla Foods was quick to recognise this gap in the market and identified the need for an on-the-go milk for older people. "We have filled this gap in the convenience sector with Cravendale in a 284ml pack size, which comes in semi-skimmed and wild strawberry and vanilla Hint Of flavours," says the firm's trading director for milk and cream Ash Amirahmadi. "More recently we have made this available in four-bottle multipacks targeted at parents seeking a convenient, cost effective and healthy alternative for children's lunchboxes, as well as appealing to adults looking for a nutritious snack, or an isotonic boost following a workout."
However, there is a major issue with milk being marketed as a health drink. "The problem is that consumers don't know what milk is and whether it is healthy," says Liz Broadbent, marketing director at the Milk Development Council (MDC). "They wildly overestimate the fat levels and don't understand that it's a nutrient-based product," she says. "The average perception is that milk is 33% fat. If that were true, it wouldn't pour."
While some processors would argue that the vast array of milks available confuses consumers even more, Broadbent feels that it can improve their understanding of the product. "Having more milks on the market helps," she says. "Research shows that more milks make people slow down and think. Otherwise it's just red, green or blue [labels] and consumers are not engaging."
But once people have taken the time to read labels, will they understand the benefits of each product? "To stop confusion, our job is to get people [processors] to agree on key messages," says Broadbent. "We want to avoid an internal battle within the milk sector. Milk is better than fizzy drinks or water and that's the battle we want."
Unfortunately for the MDC, not all firms are in support of the 'one for all, and all for one' approach. "Anyone selling in the milk market is in direct competition," says Ed Salt, sales director at Delamere Dairy. "Everyone will nick customers from each other."
Faith in functional
Delamere has just launched Top Life, a glucosamine and chondroitin enriched semi-skimmed milk designed for the older age group who want to stay active. Glucosamine and chondroitin are used in supplements, and are believed to ease joint pain. They are also common in dog food. "Supplements in pet food often come into the human food market," notes Salt. "Milk is a good carrier for any supplement and we wanted a product that related to calcium and the benefits of milk." Although Salt admits that there is no conclusive evidence of glucosamine and chondrioitin's effects, he claims people have taken the supplements for many years. "It's up there with omega-3," he says.
Salt initially had concerns over whether consumers would spend money on a product, when they could not see immediate results, but the runaway success of Dairy Crest's St Ivel Advance, which is now valued at £13M, answered his question.
Organic advance
With organic milk growing at 51% year on year, manufacturers have been falling over themselves to get in on the act. Dairy Crest has just launched Country Life Organic Milk and Robert Wiseman is preparing to target the organic market; but the UK is currently experiencing an organic milk shortage.
"The problem is that dairy producers are reluctant to go into the organic sector as a few years ago it was in over supply," explains Amarjit Sahota, director with industry analyst Organic Monitor (OM). "Lots of farmers jumped on to the organic bandwagon and it's a case of once bitten, twice shy. Now they are waiting to see what will happen."
Sainsbury has enticed more farmers into the sector by working with them to cover the costs involved in conversion and offering 12-month supply contracts once their milk can be certified as organic. In the meantime, the retailer has started selling the transitional product as 'in-conversion' milk, pricing it between organic and standard varieties.
While it could be argued that there are markets for both functional and organic milks, with some consumers wanting to try enriched products and others preferring to stay natural, Sahota claims that functional milks are in direct competition with organic as they are both marketed on their health benefits.
There were 200Ml of organic milk sold last year, he says. "Functional milk sales were 5% of that, but it's growing faster as it's from a smaller base."
Sahota is confident that there is scope for both functional and organic milks to grow. British dairies have realised that they can't compete with commodity products from larger rivals, so we've seen a lot of interest in value-added, he says.
"Value-added milk has 6% of [overall milk] sales. It can easily reach double that in the next four to five years." FM
Fat reduced future
As part of the EU-funded Lipgene project, which aims to tackle the prevalence of the 'metabolic syndrome', scientists at Reading University are working on a low fat milk.
"Milk is condemned for being high in saturated fatty acids," says Dr Caroline Rymer, research fellow at Reading's animal science research group. The project is looking to replace the saturated fat cows naturally make with monounsaturated fatty acids by feeding them more long chain fatty acids.
"The intention is to rely on the cow's dietary supply of oil to filter through to the milk fat. We are looking at increasing the cow's natural ability to de-saturate fat in the udder," says Rymer. The fat-reduced milk is more prone to oxidation than ordinary milk, but this problem may be reduced by increasing vitamin E content, she adds.
The Lipgene project started two years ago and is due to finish in 2009. Results will be released generally as the aim is to alter public health nutrition, rather than make a niche product, she claims.
Milking the profits
Total Great Britain milk market (ambient and fresh): £2,583.3M (+3.9% year-on-year) The market has seen inflation over this period with volume up just 0.5% - a result of growth in organics, fortified and soya milk
Organic cows' milk: £119.1M (+51% year-on-year) This represents 42% of the overall category growth
Ready to drink flavoured milk: £109.8M (+9% year-on-year)
The growth here has been driven by the fresh segment. Only 10% of growth has come from NPD. Cravendale flavoured milk is the biggest NPD contributor with sales of £1.6M Year to July 15 (moving annual total): ACNielsen