• by Steve Ellwanger , November 8, 2019

In the 12-month period ended June 30, the fastest-growing beverage subcategory was flavored milk — with a 76% increase in product launches versus the year-earlier time frame. Dairy companies and others are not only pushing taste boundaries but also promoting such features as enhanced milk, advanced filtration technologies and alternatives to soy in the plant-based space.

“We hear a lot about how milk is a dying category and younger generations are moving away from it,” says Tom Vierhile, vice president of strategic insights North America for Netherlands-based Innova Market Insights. “But over the last year, there’s been quite a bit of new product activity with regard to flavors that are trying to break the mold somewhat.” 

In this Q&A, Vierhile walks CPG FYI through the maze of new milk iterations and touches on how coffee “has become like Silly Putty.”

CPG FYI: What are traditional dairy brands like Borden up to?

Vierhile: Borden Kid Builder chocolate milk with no sugar added is making a high-protein claim combined with low sugar, so that’s kind of a sweet spot with consumers. Then you have Borden State Fair Inspirations whole milk, which comes in blueberry cobbler and banana taffy. These are flavors that the average consumer would not expect from dairy producers.

CPG FYI: Tell us how filtration technology continues to impact the milk category.

Vierhile: It was Organic Valley that introduced ultra-filtered, organic whole milk. Now other companies have been moving in that direction. 

The success of Coca-Cola’s Fairlife [made using a filtration process that produces lactose-free milk with more protein, calcium and less sugar than regular milk] has shown that there is a big market for enhanced milk products. As the Wall Street Journal reported, in five years Fairlife went from zero sales to $450 million. 

So it does suggest that there’s some latent demand out there for maybe a better product that’s not sold exclusively as a commodity. 

CPG FYI: What other milk trends are you seeing?

Vierhile: Indulgence is another factor that’s drawing consumers. Instead of apologizing for products that may be a little bit more indulgent, you’re seeing category players move to these products by leveraging well-known confectionery brands. Examples include Snickers and Twix chocolate low-fat milk from Mars Wrigley.

CPG FYI: And now they’re also putting flowers into milk?

Vierhile: Burroughs Family Farms has come out with some interesting products, one of which is lavender-flavored milk. We’re definitely seeing a move toward more floral-type flavor profiles across the whole beverage spectrum. 

CPG FYI: Let’s talk about the plant-based realm.

Vierhile: You’re beginning to see dairy companies react more to plant milk products. Dairy Farmers of America has introduced a blend of cow’s milk with almond milk, which makes for interesting bedfellows if you think about it. 

The idea there is they’re trying to reach out to millennial consumers who may not be regular milk drinkers but have gravitated toward plant alternatives like almond milk as well as soy milk. 

CPG FYI: Why are oat-based milks on the rise?

Vierhile: One of the more promising developments in plant milk is companies moving outside of soy as a base. Soy has some baggage because of genetic modification. So oat is emerging as a product platform to watch. 

It was Silk that put soy milk on the map. Last month they came out with Silk Oat Yeah, with zero grams of sugar. That’s a significant product launch. 

CPG FYI: Never a dull moment in ready-to-drink coffee, right?

Vierhile: It’s pretty crazy. Coffee has become whatever you want it to be. Sort of like Silly Putty, that you can pull it apart and twist and make into different things. 

CPG FYI: What are some examples?

Vierhile: There’s more cold-brew varieties on the market, including organic gingersnap oat milk latte from Chameleon. Bailey’s introduced a nonalcoholic salted caramel cold brew. And then you have the shelf-stable Nescafé coffee protein smoothie. And — maybe running for the world’s longest product name — there is Smari Kaffi Icelandic Keto Latte Protein Coffee.