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Developing innovative ideas is a balance between answering consumers’ direct needs and identifying new needs within the category, according to Kevin Deegan, PhD, consumer insight manager at Valio.
“We have a responsibility to come out with new, exciting innovations, which probably are not answering a need immediately, but can develop into their own needs over time,” he said.
“For those of us in dairy, there is a balance between consumer-led innovation and technology-led innovation.”
The Finnish company Valio, for example, launched a low-lactose powder in 1978, a decision not driven by overwhelming consumer demand. In 2001, the dairy company came out with a completely lactose-free milk using its own patented technology.
Through consumer education and continually updating its product ranges, lactose-free milk is now the norm in Finland and much of Europe, being seen as a healthy alternative because of the company’s initiative to answer this unmet need, Deegan claimed.
However, dairy developers and manufacturers must still gauge the commercial viability and set realistic development expectations when it comes to bringing new product ideas to market.
“Innovation, while exciting, is also really hard,” Anand Rao, PhD, VP of ingredients at Agropur, said. “Available technology takes precedence in being a driver for innovation.”
Sinéad Proos, senior innovation and commercialisation manager at Food for Health Ireland (FHI), added that tapping into a viable innovative idea in the dairy category hinges on fully understanding the current state of the market, regulatory environment, and technological landscape.
“You have to realize, it’s not going to happen overnight,” Proos said. “It’s not just about great ideas, but really making sure that you develop a pipeline.”
What will be next?
The basis of discovering new and innovative ideas within dairy revolves around “competitive bioactive development,” according to Proos.
“All we’re trying to do is harness what nature has created,” she said. “There’s a challenge there to say, ‘Is that the best that nature has created for that particular compound or that particular bioactive?’.”
Proos added that a nutritional focus on gut health will be key to the next wave of innovation in the dairy space.
“The big thing we see is a focus on fermented dairy whether it’s proteins, whether it’s lactose, whether it’s milk itself, and really looking how that impacts on the health effects of the milk composition,” she said.
“We’re riding the protein wave right now, but I do think we will start to hear more about dairy lipids.”
Customization of dairy products will become more prevalent as well, but it is unclear how the dairy industry will capture this trend at the moment, according to Deegan.
“We’re becoming less and less willing to accept things that are not specifically made for us and where that goes, I don’t know.”
The source for many new ideas for the dairy space will come from partnerships between small and large companies, according to Rao.
Agropur launched its “Inno Challenge,” an incubator program focused on developing companies that offer a new for consumers to experience dairy.
“Through these innovation platforms, we are creating incubators for small manufacturers to bring their ideas, develop those ideas, so we can provide the resources that we have available within these large organizations… allowing those innovative ideas to prosper.”
Dairy is the benchmark
The rise of plant-based dairy alternatives should be seen as an opportunity rather than a threat, according to Deegan, who noted that the dairy industry first needs to understand why people are buying more vegan or dairy-free products.
“The amount of people who identify themselves as vegan hasn’t increased, but what has increased is the interest in a vegan lifestyle and vegan products,” Deegan said.
When Valio asked consumers in Finland why they consume non-dairy products, the top reason given was the amount of variety in the category, according Deegan, indicating that many consumers are not choosing plant-based products for ethical reasons.
“When we think about the types of products (e.g. nut milks and cheeses) that are emerging in the non-dairy category, the benchmark is the dairy product,” Deegan said.
“These non-dairy products are targeting dairy flavors and dairy textures,” Rao added, saying that the dairy industry must ask itself why consumers are migrating to plant-based alternatives and meet those driving needs.
“I think we need to be a little bit more proud and a little bit more brave in what we say about our products and to champion the functional benefits of dairy,” Deegan added.
“One of, if not the biggest consumer trends at the moment is the whole naturally-functional trend, and dairy is a ‘shoe in’ for that.”