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GLOBAL: Functional dairy drinks set for further growth

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Sales of functional dairy drinks across Western Europe, the US and Japan are projected to reach over EUR6bn (US$8.5bn) by 2011, according to a study on the sector by market analysts Zenith International.

Zenith's 2007 Functional Dairy Drinks report forecasts that sales will rise to 1.6bn litres by 2011, representing some EUR6.25bn in sales.

Zenith also reported that sales in the sector rose by 12% to just under 1bn litres last year, with sales values rising to EUR3.43bn.

"The early influence of Japan's Yakult, the daily dose probiotic yoghurt shot, is undoubtedly one of the main reasons why the functional dairy drinks market has been able to develop so successfully," commented Zenith market analyst and functional drinks newsletter editor Jenny Foulds. "Technology advances, scientific research and product innovation are now enabling manufacturers to introduce new health positionings based on a range of emerging ingredients."

The report also revealed that Western Europe is by far the largest of the three markets, and saw strong double-digit growth in 2006. Meanwhile, the US is experiencing year-on-year growth of around 50%, albeit from a low base. As a result, Japan's volume share is declining.

However, Zenith said that consumer confusion caused by health claims and the overwhelming variety of products available is hampering growth. But these difficulties are being offset by dairy-based opportunities in other functional beverage categories, such as sports drinks, energy drinks and cosmeceuticals.

Other challenges to overcome include increasingly strict regulation of health claims, delivering clear messages to consumers, and satisfying consumer interest in new niches, Zenith said.


Sectors: Soft drinks

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