US dairy ingredients still behind, report

UK-based Landell Mills had anticipated in earlier reports that dairy companies would make a much stronger presence in the US nutraceutical market. However, the consultancy said this has not turned out to be the case.

The US dairy nutraceutical ingredients market is still far behing those of Western Europe and Japan the report found, but opportunities for manufactures will increase as consumer health education improves.

In the category of fortified/functional dairy products, for example, the US market share is significantly smaller than that of Western Europe or Japan. According to market analyst Euromonitor International, 2005 sales for these products stood at $1245.4mn in the US, compared to $6725.1mn in Western Europe and $5075.9mn in Japan.

"We see an increasing understanding of the link between diet and health here in the US,"​ said Landell Mills director Ross Christieson. "Consumers are also starting to buy into the concept that 'prevention is better than cure' when it comes to dealing with illness.​

The report points to key therapy areas that need greater attention from dairy ingredient manufacturers, including: obesity and sports performance foods.

While yoghurt has been a blockbuster product for nutraceutical ingredient manufacturers in Europe, particularly in the area of probiotics, the product has never taken off to the same degree in the US. Instead, the report highlighted cheese as a vehicle that is potentially more appropriate for such dairy nutraceuticals in the US.

Landell Mills concludes that targeted communication strategies are needed, with dairy companies often well positioned to impart the potential health and wellness benefits to consumers. Companies need to use "science"​ to raise credibility for this sector, according to the findings.

In its report, Landell Mills put forth industry associations as having an important role in developing the dairy nutraceutical market.