lactose-free 2012 brochure

6
Published March 2012 Lactose-free dairy Opportunities, strategies and key case studies Lactose-Free Dairy www.new-nutrition.com Only 3% to 4% of Norwegians are thought to be lactose intolerant, but in the region of 10% believe themselves to have the condition – creating a good environment for the brand to thrive. Other licensees include South Korea’s Maeil, which sells an eponymous lactose-free brand using Valio’s technology, and Spain’s Kaiku, which markets Kaiku Sin Lactosa. Both partnered with Valio for the first time in 2005. Another licensee is Emmi in Switzerland, which has worked with Valio since 2003. Further, Valio has introduced Valio Zero Lactose skimmed milk powder for industrial applications, such as chocolate manufacturing, ready meals, soups and ice cream. The facts speak for themselves: Valio’s Zero Lactose has been an outstanding success for the company from both a product development and marketing perspective. Challenges remain, primarily in the form of rivals undercutting the large premiums Valio has until now been able to command for its products. But Zero Lactose has shown itself to be a proposition that many consumers with lactose intolerance, across Europe and beyond, both want and enjoy. The lactose may be Zero, but for Valio it has proved to be a real hero. TABLE 3: VALIO LAKTOOSITON STRAWBERRY-CURRANT YOGHURT NUTRITION FACTS Ingredients: Milk.(Pasteurised),.White.Sugar,.Strawberry,.Green.Currant,.Red.Currant,. thickeners.(Modified.Starches.(Modified),.Pectins),.Flavouring.Substances.(Vanillin),.Salts. (E331).(Acidity.Regulators),.Carmine.(Food.Colours),.yogurt.culture,.Vitamin.D Nutrition: Per.100g:.Energy.360kJ/85kcal,.Protein.35g,.Carbohydrate.13g.(of.which. Sugars.13g.(of.which.Lactose.0g)),.Fat.21g.(of.which.Saturated.Fat.12g),.Dietary.Fiber. <1g,.Sodium.0045g,.Calcium.120mg.(15%.RDA),.Vitamin.D.1µg.(20%.RDA) TABLE 4: VALIO LAKTOOSITON CHOCOLATE MILK NUTRITION FACTS Ingredients: Milk.(High.Pasteurised,.High).(Vitamin.D),.White.Sugar,.Cocoa.Powder,. Carrageenan.(Stabilizers),.Salt,.flavours.(among.others.vanilla),.Lactase Nutrition: Per.100g:.Energy.250kJ/60kcal,.Protein.33g,.Carbohydrate.94g.(of.which. Sugars.94g),.Lactose.0g,.Fat.1g.(of.which.Saturated.Fat.06g),.Dietary.Fiber.0g,. Sodium.004g,.Calcium.110mg.(14%.RDA),.Vitamin.D.1µg.(20%.RDA),.Vitamin.B12. 04µg.(16%.RDA),.Vitamin.B2.02mg.(14%.RDA) TABLE 5: VALIO LAKTOOSITON QUARK NUTRITION FACTS Ingredients: Quark.Cheese.(Milk.(Pasteurised),.souring.agent),.Cream. (Pasteurised),.White.Sugar,.Waters,.Cocoa.Powder.(Powdered),.Pectins. (Thickeners),.Modified.Starches.(Modified),.Caramelised.Sugar.Syrup,. Flavouring.Substances Nutrition: Per.100g:.Energy.650kJ/160kcal,.Protein.72g,.Carbohydrate.16g. (of.which.Lactose.0g),.Fat.7g 20 Lactose-Free Dairy www.new-nutrition.com create “expert brands” – ones that dominate the niche (as our Case Studies will show) and earn superior selling prices and profit margins. The most successful brands are those that find a clear expert position and stick to it – Red Bull, for example, “gives you wings”; Danone Actimel “supports your natural defences”; Danone Activia is “a natural way to regulate your digestive system”. Red Bull is about one product, one benefit and one brand and so too are many of the most successful brands. Most businesses don’t have the time, the resources or the skills to stretch themselves and their brands thinly over a range of products, benefits and categories. Even companies that do have resources are notable for being very focused – Danone, for example, has only four power- brands that between them account for 50% of its dairy sales. Marketing is not a battle of products; it’s a battle of perceptions. This means that once a brand has captured and reinforced its position in consumers’ minds, then it’s very difficult to change those minds. The past 15 years of health marketing have shown very clearly that the best way – and indeed the only way – to get consumers’ loyalty and generate repeat business is to be “the expert brand”, the brand that’s the most credible source of the health benefit that the customer is looking for. Consumers trust brands that are “expert” and very focused on a specific health condition. This is precisely what the three brands in our case studies have done and this “expert brand” focus is a key element in creating success in the lactose-free market. Where are the opportunities? At first sight it might appear that Asia, with its large, fast-growing population, its increasing wealth, its rising consumption of dairy products and above all its high levels of lactose intolerance (see Charts 1 and 2) would be an obvious target market for lactose-free dairy products. But, somewhat counter-intuitively, this may not be the case. As Table 2 shows, per capita consumption of dairy is very low in Asia, especially when compared to Europe. In fact, while liquid milk is a mass-market, low-priced everyday staple in western markets, in Asia it is a premium-priced, niche business. In other words, very few people are consuming much dairy and those that are may not be consuming enough on a daily basis to encounter the symptoms of lactose intolerance. And in fact according to a study published in Biomedical and Environmental Sciences in 2011, Asian people might be able to tolerate moderate dairy consumption of up to In Asia there are very, very few lactose-free products. Even Fonterra, the New Zealand based dairy group whose main export market is Asia, has only recently introduced its first lactose-free brand, but it has done so in New Zealand, its domestic market, which has a high per capita consumption of dairy. Zero Lacto, processed using the lactase enzyme method of lactose-removal and therefore somewhat sweet, comes in full-fat and trim versions. 11 Lactose-Free Dairy www.new-nutrition.com 4 CHART 1: LACTOSE INTOLERANCE AROUND THE WORLD Native. Americans Asians African.&. Caribbean. peoples Mediterranean. people Northern. Europeans Anglo. Americans 100% 95% 75% 50% 10% 15% 0 10 20 30 40 50 60 70 80 90 100 % CHART 2: LACTOSE INTOLERANCE VARIES GREATLY WORLDWIDE Source: Wikipedia Published by Report Lactose-free dairy Opportunities, strategies and key case studies

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Lactose-free 2012 Brochure

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  • Published March 2012

    Lactose-free dairy Opportunities, strategies and key case studies

    Lactose-Free Dairy

    www.new-nutrition.com

    Only 3% to 4% of Norwegians are thought to be lactose intolerant, but in the region of 10% believe themselves to have the condition creating a good environment for the brand to thrive.

    Other licensees include South Koreas Maeil, which sells an eponymous lactose-free brand using Valios technology, and Spains Kaiku, which markets Kaiku Sin Lactosa. Both partnered with Valio for the first time in 2005. Another licensee is Emmi in Switzerland, which has worked with Valio since 2003. Further, Valio has introduced Valio Zero Lactose skimmed milk powder for industrial applications, such as

    chocolate manufacturing, ready meals, soups and ice cream.

    The facts speak for themselves: Valios Zero Lactose has been an outstanding success for the company from both a product development and marketing perspective. Challenges remain, primarily in the form of rivals undercutting the large premiums Valio has until now been able to command for its products. But Zero Lactose has shown itself to be a proposition that many consumers with lactose intolerance, across Europe and beyond, both want and enjoy. The lactose may be Zero, but for Valio it has proved to be a real hero.TABLE 3: VALIO LAKTOOSITON STRAWBERRY-CURRANT YOGHURT NUTRITION FACTS

    Ingredients: Milk.(Pasteurised),.White.Sugar,.Strawberry,.Green.Currant,.Red.Currant,.

    thickeners.(Modified.Starches.(Modified),.Pectins),.Flavouring.Substances.(Vanillin),.Salts.

    (E331).(Acidity.Regulators),.Carmine.(Food.Colours),.yogurt.culture,.Vitamin.D

    Nutrition: Per.100g:.Energy.360kJ/85kcal,.Protein.3 .5g,.Carbohydrate.13g.(of.which.

    Sugars.13g.(of.which.Lactose.0g)),.Fat.2 .1g.(of.which.Saturated.Fat.1 .2g),.Dietary.Fiber.

  • ABOUT THIS REPORT

    Most adults in the world are lactose intolerant, although the prevalence varies widely from low levels of lactose intolerance in Europe (around 10%) to as many as 95% of Chinese people.

    Yet surprisingly, over the past five years it is Europe that has been the fastest-growing market for lactose-free dairy.

    Growth rates and forecasts: This report estimates the size of the current market and forecasts growth out to 2016. It is Europe that is likely to remain the fastest-growing market for the next five years. The report explores why the Asian market though growing fast still lags Europe and may continue to do so.

    Strategy and case studies: Using detailed Case Studies of Valios Zero Lactose, Arlas Lactofree and McNeils Lactaid, the report sets out the seven steps to creating a lactose-free dairy brand.

    We show you how an effective strategy can win customers for life, as it has for the brands we profile. These loyal customers are willing to pay premium prices usually a 100% premium to regular products.

    Lactose-free dairy enjoys a profitable niche: The growing success of lactose-free brands including Valios Zero Lactose and Arlas Lactofree illustrates the power of serving a niche in the right way. Niches of consumers can be premium-priced and very profitable.

    The service opportunity: The medical statistics on lactose intolerance in fact underestimate the size of the opportunity. Beyond the medically-diagnosed lactose intolerant, there is a much larger group of self-diagnosers possibly twice as many as the medically diagnosed who become loyal to brands that provide services alongside the brand that help them with their health concerns.

    LACTOSE INTOLERANCE VARIES GREATLY WORLDWIDE

    Source: Wikipedia

  • CONTENTS

    Executive summary

    Lactose intolerance

    What is lactose intolerance?

    Who is lactose intolerant?

    Seven success factors in lactose-free dairy

    Success factor 1: Make sure consumers feel the benefit this is a market where technology matters

    Success factor 2: Make sure it tastes good

    Success factor 3: Communicate to health professionals

    Success factor 4: Have a big marketing budget

    Success factor 5: Offer not just a product, but a service to help the self-diagnosers

    Success factor 6: Build a range that meets everyones needs

    Success factor 7: Focus on creating an expert brand

    Where are the opportunities?

    Europe forging ahead

    The rewards: consumer loyalty for life and sales success

    Case Study 1: Valio Zero Lactose

    Sales success

    Price undercutting a threat

    Drinking quality of lactose-free convinces whole family

    Educating health professionals

    International success a big surprise

    Case Study 2: Arla Lactose

    Premium priced but sales, purchase frequency on the way up

    Innovative product and solid marketing keys to success

    Range extends to cream, cheese

    Lactose-free on-the-go

    Women the keenest buyers

    Online efforts

    App directs people to lactose-free eateries

    Online presence crucial

    Educating professionals

    Merchandising challenge

    Consumer loyalty for life

    Case Study 3: Lactaid, Americas lactose-free giant

  • CHARTS AND TABLES

    BOXES

    Chart 1: Lactose intolerance around the worldChart 2: Lactose intolerance varies greatly worldwideChart 3: The nutritional product life cycle where the lactose free opportunity sitsChart 4: Launches of lactose-free dairy products in Europe, 2007-2011Chart 5: Launches of lactose-free dairy products in North America, 2007-2011Chart 6: Sales history of Lactaid milk, the biggest low-lactose dairy brand on the US market, 2007-2011Chart 7: Sales history of Lactaid range, 2007-2011

    Table 1: Pro rata sales comparison of top three brandsTable 2: Per capita consumption of milk and milk consumption in various countries, 2006 dataTable 3: Valio Laktoositon Strawberry-Currant Yoghurt Nutrition FactsTable 4: Valio Laktoositon Chocolate Milk Nutrition FactsTable 5: Valio Laktoositon Quark Nutrition FactsTable 6: Nutrition Facts for Lactofree hard cheeseTable 7: Nutrition Facts for Lactofree real fruit yoghurt

    Box 1: Methods of lactose-removal

    Box 2: A German regional dairy creates an expert brand in lactose-free

    Box 3: Consumer education is key to a lactose-free brand

    Box 4: Arla Lactofree iphone app

    Box 5: Educating consumers about lactose intolerance through Facebook

    Box 6: Lactaid Milk the original lactose-free milk advertisement

    EUROPE

    Belgium

    Estonia

    Finland

    France

    Germany

    Latvia

    Lithuania

    Russia

    Spain

    Sweden

    Switzerland

    Norway

    UK

    NORTH AMERICA

    AUSTRALASIA

    New Zealand

    ASIA

    China

    South Korea

    Anchor

    Arla Lactofree

    Dairy Ease

    Emmi

    Facebook

    Fonterra

    HP Hood

    Kaiku Sin Lactosa

    Lactaid

    Land OLakes

    Maeil

    McNeil

    MilchL

    Minus L

    Omira Milch

    Real Goodness

    TINE Laktosefri

    Twitter

    Valio Laktoositon

    Valio Laktosefri

    Valio Zero Lactose

    Zero Lacto

    COMPANIES AND BRANDS IN THIS REPORT REGIONS AND COUNTRIES IN THIS REPORT

  • ABout us

    ThisreportdrawsonmaterialpublishedinourjournalNew Nutrition Business,whichprovidescasestudiesandanalysisofsuccessandfailureintheglobalnutritionbusiness.Itisusedbymorethan1,700corporatesubscribersin42countries.

    Since1995wehavebeenresearching,analysingandforecastingtheglobalnutritionbusiness,andweprovideexpertconsultancytocompaniesandgovernmentorganisationsaroundtheworld.

    ManycompaniesmakeNew Nutrition Businessavailableonlinetoalloftheirresearch,productdevelopmentandmarketingstaff.Ourwebsitewww.new-nutrition.comcontainsthelargestsearchableinternetdatabaseofinformationaboutthebusinessoffoodandhealth.

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    CoMPAnIes AnD BRAnDs

    AlproAmealSAmpAnleneAscendBecelCalpisCampbellsIQCampinaOptimelCerealPartnersCoca-ColaDairyCrestDairyFarmersBestOmega-3DanacolDanoneActimelDanoneActivDanoneActiviaDanoneEssensisDelamereDairyTopLifePrimeTimeEmmiAktifitEmmiLactoTabEvianEvolusFlorapro.activFonterraFullThrottleGatoradeGeneralMillsGeneralMillsHarmonyGeorgeWestonsHanselNaturalMonsterHeroFruit2DayInnocentKelloggsEnsembleKelloggsSpecialK

    KelloggsK-SentialsLipidNutritionLiptonMeijiDairiesMinuteMaidHeartwiseEnvigaMinuteMaidEnhancedJuiceMllerVitalityMurrayGoulburnNutritionalsNairnsNakedNaturallyGorgeousNesteaNestlNovartisAvivaPepsiCoPomWonderfulProvexisQuakerOatsNutritionforWomenRedBullRiceCrispiesRockstarSanitariumShreddedWheatShreddiesSilkSircoTipTopUpOmega-3TropicanaUnileverAdeZUnileverpro.activUnileverTakeControlUp&GoValioVolvicWeetabixYakult

    ContInents/CountRIes/RegIons

    AsiaChinaHongKongIndiaIndonesiaJapanKoreaMalaysiaSingaporeTurkeyAustralianorth AmericaCanadaUSeuropeAustriaBelgiumFinlandFranceGermanyIrelandItalyNetherlandsNorwayPortugalScotlandSpainSwitzerlandTurkeyUK

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    Lactose-Free Dairy

    www.new-nutrition.com

    Only 3% to 4% of Norwegians are thought to be lactose intolerant, but in the region of 10% believe themselves to have the condition creating a good environment for the brand to thrive.

    Other licensees include South Koreas Maeil, which sells an eponymous lactose-free brand using Valios technology, and Spains Kaiku, which markets Kaiku Sin Lactosa. Both partnered with Valio for the first time in 2005. Another licensee is Emmi in Switzerland, which has worked with Valio since 2003. Further, Valio has introduced Valio Zero Lactose skimmed milk powder for industrial applications, such as

    chocolate manufacturing, ready meals, soups and ice cream.

    The facts speak for themselves: Valios Zero Lactose has been an outstanding success for the company from both a product development and marketing perspective. Challenges remain, primarily in the form of rivals undercutting the large premiums Valio has until now been able to command for its products. But Zero Lactose has shown itself to be a proposition that many consumers with lactose intolerance, across Europe and beyond, both want and enjoy. The lactose may be Zero, but for Valio it has proved to be a real hero.TABLE 3: VALIO LAKTOOSITON STRAWBERRY-CURRANT YOGHURT NUTRITION FACTS

    Ingredients: Milk.(Pasteurised),.White.Sugar,.Strawberry,.Green.Currant,.Red.Currant,.

    thickeners.(Modified.Starches.(Modified),.Pectins),.Flavouring.Substances.(Vanillin),.Salts.

    (E331).(Acidity.Regulators),.Carmine.(Food.Colours),.yogurt.culture,.Vitamin.D

    Nutrition: Per.100g:.Energy.360kJ/85kcal,.Protein.3 .5g,.Carbohydrate.13g.(of.which.

    Sugars.13g.(of.which.Lactose.0g)),.Fat.2 .1g.(of.which.Saturated.Fat.1 .2g),.Dietary.Fiber.

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