IFF, a global provider in the food and beverage, personal care and health markets unveils a report that depicts the evolving consumer trends in the dairy and alternative dairy categories.
The report, derived from a comprehensive quarterly global survey of 21,000 consumers and monthly market data, highlights how brands can win over budget-conscious consumers by offering health benefits and resonating with consumer values.
“In the face of a global cost-of-living crisis, dairy and alternative dairy brands have found a silver lining by focusing on quality and value,” said Richard Neish, head of global futures, Consumer Intelligence at IFF. “It’s not about competitive pricing; it’s about delivering products that enhance wellness and align with consumer values.”
The results
The report identifies five key trends that will drive market changes and product innovation with ‘Better-Being’ being the leading factor, reflecting a significant shift in consumers’ health preferences.
60% of respondents said they were always or often influenced by health labelling in their product choices.
Dairy has been one of the categories worst hit by inflation, with value compound annual growth rate (CAGR) outstripping volume CAGR. Despite inflation’s impact on the dairy industry, the report highlights that since 2022, consumers have prioritised quality over cost, with many opting for premium brands that are consistent in this aspect.
Private label products
Private label dairy products have emerged as a popular choice during the economic downturn, with 35% of consumers gravitating towards budget-friendly options without sacrificing quality.
Quality over price
63% of respondents said they started, or continued, to buy more expensive dairy brands in Q4 of 2023, and 52% said they preferred to pay more to ensure that quality is not compromised.
The report emphasises the strategic importance of integrating functional wellness ingredients such as probiotics, to add value beyond pricing.
Driving value with values
The IFF insights also reveal a compelling narrative of brands “driving value with values,” resonating with consumers who seek to align their desire for sustainability or ethical consumption with their food choices.
This is reflected in 61% of respondents — particularly for Gen Z members — with 67% emphasising the importance of aligning purchases with values.
Guilty pleasures
Additionally, the report highlights a shift towards indulgence and convenience, highlighting consumer desire for pleasurable experiences and consume on-the-go products like ice cream.
