Dive Brief:
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Demand for organic dairy products continues to increase, heading for a CAGR of 14.25% between 2016 and 2022, Allied Market Research reported.
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Consumer desire for natural products and awareness of the category's health advantages — as well as the disadvantages of non-organic dairy products — are fueling the rapid growth.
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Analysts predict that innovative product developments such as energy-based milk drinks and flavored organic milks will boost sales from $14.5 million in 2015 to an estimated $36.7 million in 2022.
Dive Insight
Consumer health trends have expanded the overall organic space from a niche market to a mainstream demand. A few years ago, shoppers would have to search for organic produce and products in their supermarkets. Now most retailers have dedicated large areas exclusively to organic offerings.
This trend, along with consumer concern over food safety, environmental sustainability and ethical treatment of animals have propelled the rise in organic dairy sales. Manufacturers have also enticed consumers by developing and marketing organic products that are also low in fat, sodium and sugar. By highlighting these product qualities, dairy companies can entice consumers that are less concerned with animal welfare than they are with better-for-you foods.
Much of this interest is fueled by fear over bovine growth hormones and fertilizers and pesticides like that could cause adverse health affects. If manufacturers continue to emphasize that their products are free from these chemicals and promote education about non-organic dairy, consumers may be convinced to spend more for their products. These strategies could also be applied to organic yogurt, the dairy product with the second fastest growth.
The higher price of organic products may still be a deterrent to the average shopper, but on the whole, consumers are becoming more interested in organic benefits.