Marketing shortfalls hold dairy back from seizing full potential offered by demand for functional products

Growing at a compound annual growth rate of 7.5%, the global functional food market is projected to reach $309bn by 2027 as consumers increasingly look for products that deliver more than taste and sustenance, according to Precedence Research. Leading the category in terms of value in 2019 was dairy, which Precedence Research predicted late last year would expand at a CAGR of 8% through 2027, thanks in part to is ability to meet demand for products that support immunity, digestive health, sports recovery, hydration and more.

But dairy is at risk of losing its pole position to other categories because many consumers don’t understand the basic benefits it offers – a shortcoming that is compounded by many brands’ failure to fully use packaging to tout their products’ nutritional and functional value.

“There is an opportunity being missed … if you’re not telling consumers that dairy is a good source of calcium, protein and vitamin D,”​ said John Crawford, vice president of client insights for dairy at IRI Worldwide.

He explained during a webinar hosted by VentureFuel that while many consumers are researching nutrition and functional benefits of different foods, beverages, spices and supplements, most don’t know the inherent nutritional value that dairy offers.

“Particularly younger consumers don’t know,”​ he said.

While older Millennials and Generation Z grew up with marketing campaigns touting “milk it does a body good” and urging them the “pass it on” how milk supports strong bones, healthy hair and teeth and muscle development, younger generations, Crawford said that younger generations “didn’t grow up on all the research that came through with milk and dairy.”

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