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The U.S. Market for Flavored Dairy Beverages

The flavored dairy beverage business is poised for unprecedented growth in a category that previously positioned milk as a commodity rather than a drink. This new report from Packaged Facts provides historical data as well as market growth projections fn the flavored dairy beverage business, which encompasses refrigerated and shelf-stable flavored milks and milkshakes, coffee-milk drinks, dairy-based drinks, yogurt beverages, smoothies, milk flavorings, hot cocoa mixes. Learn how you can become part of this $2.2 billion beverage segment, which is predicted to show double-digit growth during the next decade. This report details innovations in flavors, packages, and manufacturing, which are just some of the driving forces behind new product development. Learn how single-serve bottles, licensed characters, cool flavors, carbonation, and old-fashioned wholesomeness are making milk and milk-based beverages the drink of choice for today's healthy lifestyle-seeking, grab-and-go consumer. The report also includes profiles of the top players in the flavored dairy beverage business, demographic data and brand share information.


Scope And Methodology

Market Parameters

This report addresses the U.S. flavored dairy beverage industry. The primary focus is on supermarket sales, but the report also includes qualitative and quantitative information on mass merchandisers, drug stores, convenience stores (c-stores), and vending. This report does not include ready-to-drink traditional dairy products such as white milk, cream, or evaporated and condensed milk, nor does it address dairy-based nutritional or meal-replacement drinks. It does not include any flavorings intended to be used with alcohol-containing drinks, nor unsweetened cocoa powders that are designed primarily for baking. The report excludes all non-fluid dairy products such as cheese, ice cream, sour cream, and standard cup yogurt.

Report Methodology

The information contained in this report was obtained from both primary and secondary research. Primary research entailed in-depth, on-site examinations of supermarkets, drug stores, mass merchandisers, and c-stores. Company, distributor, and retailer interviews were conducted to obtain information on new product and packaging trends, marketing programs, distribution methods, and technological breakthroughs as related to the flavored dairy beverage market. Secondary research entailed data gathering from relevant sources. Included were consumer and industry publications, newspapers, government reports, financial reports, company literature, and corporate annual reports.

When defining the size of the U.S. market for ready-to-drink products, it is important to keep in mind that a large volume of chocolate milk is sold through the U.S. school lunch program, as well as other foodservice venues. These sales data are not included in this report. Vending machines, which are often classified as a foodservice distribution channel, are also not included. Market figures focus on sales through traditional grocery stores, mass merchandisers, drug stores, and c-stores, and are based on data from the U.S. Department of Agriculture (USDA), Information Resources Inc. (IRI), the National Association of Convenience Stores, and other trade sources.

Because certain single-serve dairy-based beverages are not identified in non-carbonated beverage sales through c-store channels, and because sales data for specific dairy-based drinks within larger product lines are not identified in IRI data, U.S. sales of these products are estimated by Packaged Facts based on information gathered through trade publications and manufacturer commentary.

Milk flavorings are somewhat easier to calculate because almost all sales occur through traditional supermarkets, mass merchandisers, and drug stores, the channels tracked by IRI. However, new innovative items such as cappuccino and latte mixes, as well as chai concentrates, are a very small segment, and are not tracked through in-store data collection systems. Sales for these products are estimated by Packaged Facts using trade publications and manufacturer-provided information. The analysis of consumer demographics is derived from Simmons Market Research Bureau data for spring 2001.

Press Release

Sales of Flavored Dairy Beverages to Grow by 8.4% Annually, Reach $3 Billion by 2006

New York, November 27/PRNewswire - The U.S. Market for Flavored Dairy Beverages, a newly published Packaged Facts report available at MarketResearch.com, outlines the efforts undertaken by the dairy industry to increase sales of flavored dairy products. The category has experienced steady growth in recent years, but new technologies in extending shelf life, and increased consumer awareness of the health benefits of dairy drinks, have set the market up for pronounced growth. The report estimates that the flavored dairy beverages category, which includes shelf-stable flavored milks and milkshakes, coffee-milks, dairy-based shelf-stable drinks, cultured dairy beverages, smoothies, and milk flavorings, will have annual sales of $2 billion in 2001, and will enjoy dramatically increased sales of $3 billion by 2006.

Fluid milk consumption rapidly declined throughout the 1980s and 1990s due to the lack of portable milk options available to the large number of people eating meals-on-the-go. The dairy industry has moved to deal with this situation by creating single-serve bottles and enabling increased distribution through the development of products with an extended shelf life.

According to The U.S. Market for Flavored Dairy Beverages, the market is also enjoying a new audience. “For many years flavored milk was classified as a kid’s product,” said Meg Hargreaves, VP of Research Publishing for MarketResearch.com. “The introduction of single-serve packaging and sophisticated flavors, along with the fact that adults are looking for ways to increase their calcium intake, has altered that perception.”

The U.S. Market for Flavored Dairy Beverages provides detailed information about consumer demographics, as well as distribution and marketing trends, product development, and emerging promotional campaigns. The report also includes historical sales data, as well as market projections through the year 2005.

  • Executive Summary
    • Scope And Methodology
      • Market Parameters
      • Report Methodology
    • The Products
      • Two Categories Of Flavored Dairy Beverages
      • Many Available Package Types And Sizes
      • Single-Serve Packages Drive Innovation
      • Historical Overview
      • Dairy Industry Is Highly Regulated
    • Size And Growth Of The Market
      • 2001 Sales Near $2.0 Billion
      • Sales Approach $3 Billion By 2006
        • Table U.S. Sales Of Flavored Dairy Beverages, 1997-2006
      • Market Share By Product Category
        • Table U.S. Sales Of Flavored Dairy Beverages By Product Category, 2001 (In Millions Of Dollars)
      • Projected Category Growth Uneven
        • Table Projected U.S. Sales Of Flavored Dairy Beverages By Category, 2001-2006 (In Millions Of Dollars)
      • Factors Affecting Market Growth For Ready-To-Drink Beverages
      • Few Opportunities To Grow Flavorings
    • The Marketers
      • Leading Marketers
      • Just a Marketer
      • Consolidation And Acquisition Frenzy
      • Market Driven By Packaging Innovation
      • Marketing By Season
      • Advertising Is Minimal Compared To Other Beverage Segments
    • Distribution And Retail
      • Channels Of Distribution
      • Supermarkets Claim Largest Retail Share
        • Table Share Of U.S. Flavored Dairy Beverage Retail Sales By Outlet, 2000
      • Milk Is Quite Profitable
      • Alternative Distribution Channels
      • C-Stores And Vending Are Emerging Opportunities For Dairy
      • Impulse Channels For Mixes Barely Exist
    • The Consumer
      • Convenience And Nutrition Are Key With Consumers
      • Use Of Flavored Dairy Beverages
        • Table Percent Of Consumers Who Use Flavored Dairy Beverages By Product Type And Brand, April 2000-March 2001 (U.S. Adults)
  • The Products
    • Scope Of The Report
      • Consumer Products Segment
      • Evolution Of Category
      • Chocolate Milk Enters The Market
      • Flavored Milk Offerings Expand
    • Product Breakouts
      • Two Primary Product Categories
      • Ready-To-Drink Beverages
      • Flavorings
      • Flavored Milks And Shakes
      • Not Enough Flavors For Consumers
        • Table Favorite Milk Flavors Other Than Chocolate
      • Premium Flavors And Formulations
      • Coffee And Milk Combo Craze
      • Milk As An Ingredient, Sometimes With Carbonation
      • Adding Some Culture
      • Dairy And Juice Creates a Splash
      • Organic Segment Small Yet Solid
      • Old Fashioned Flavorings
      • Upscale Coffee Mixes
      • The Trendy Chai
      • Blender Beverages
      • Shakes For Breakfast
    • Packaging Dynamics
      • Single-Serve Packages Drive Innovation
      • Packaging As Marketing Tool
      • Multi-Packs To Generate Larger Sales
      • Stirrings Remain Mostly Unchanged
    • Government Regulations
      • Federal Regulations
      • Understanding Price Supports
      • Understanding Federal Milk Marketing Orders
      • If Those Are Orders, Then What's a Compact
      • Labeling Nomenclature
      • Milk's Claims To Fame
      • Nutrition Facts
      • Expiration Dates
      • State Regulations
  • The Market
    • Market Size And Growth
      • 2001 Sales For Total Market Close To $2.0 Billion
        • Table U.S. Sales Of Flavored Dairy Beverages, 1997-2001
      • Sales Difficult To Quantify For Ready-To-Drink Products
      • Milk Flavorings Much Easier
      • Ready-To-Drink Beverages At $1.4 Billion
      • Milk Flavorings At $527 Million
        • Table U.S. Sales Of Flavored Dairy Beverages By Category: Ready-To-Drink Beverages Vs. Flavorings, 1997-2001
      • Flavored Milk Sales Increase 10.1% Annually
        • Table U.S. Sales Of Ready-To-Drink Flavored Dairy Beverages: Flavored Milk Vs. Other Flavored Dairy Beverages, 1997-2001
      • Coffee-Milk Drinks Experience Phenomenal Growth
        • Table U.S. Sales Of Coffee-Milk Drinks, 1997-2001 (In Millions Of Dollars)
      • Drinkable Yogurt Finds Success In Kids Market
        • Table U.S. Sales Of Cultured Dairy Beverages, 1997-2001 (In Millions Of Dollars)
      • Dairy-Based Shelf-Stable Drink Sales Are Difficult To Measure
        • Table U.S. Sales Of Dairy-Based Shelf-Stable Beverages, 1997-2001 (In Millions Of Dollars)
      • Traditional Milk Flavoring Sales Show Minimal Activity
        • Table U.S. Sales Of Flavorings, 1997-2001 (In Millions Of Dollars)
      • Cocoa Mixes And Milk Flavorings Increase Only 2.0% Annually
        • Table U.S. Sales Of Cocoa Mixes And Milk Flavorings, 1997-2001 (In Millions Of Dollars)
      • Coffee And Chai Mixes Liven Up Flavoring Category
        • Table U.S. Sales Of Other Flavorings/Drink Mixes, 1997-2001 (In Millions Of Dollars)
    • Market Composition
      • Flavored Milk Accounts For Most Of Market
      • Traditional Supermarkets The Primary Sales Venue
      • Chocolate Rules
      • Sales By Season Only For Warm Drinks
      • The South Loves All Flavored Milk While The Midwest Loves Chocolate
      • Westerners Flavor Their Milk The Least
      • Hot Cocoa Mix Is a Toss Up
        • Table Regional Distribution Indices For Consumption Of Flavored Dairy Beverage: By Product Type, April 2000-March 2001 (U.S. Adults)
    • Factors To Market Growth
      • Convenient And Flavorful
      • Consumers Coming Back For Calcium
      • Milk Helps Kids Maintain Healthy Body Fat
      • Maturing In a Different Way
      • Coffee-Milks As Starter Coffee Drinks
      • Extended Shelflife (Esl) Presents Distribution Opportunities
      • Changing Channels
      • Esl Also Breeds Innovation In Flavors
      • Shelf-Stable Flavored Milk On The Horizon
      • Vending Becomes Sophisticated Meal Servers
      • Multi-Packs For Growth
      • Cultured Beverages Finally Catch On
      • Premium Opportunities For Flavorings
      • Other Opportunities For Growth
    • Projected Market Growth
      • Sales To Approach $3 Billion By 2006
        • Table Projected U.S. Sales Of Flavored Dairy Beverages, 2001-2006
      • Continued Healthy Increases For Ready-To-Drink Beverages
      • Flavorings Show Little Growth
        • Table Projected U.S. Sales Of Flavored Dairy Beverages By Category: Ready-To-Drink Beverages Vs. Flavorings, 2001-2006
      • Flavored Milk Shows Strongest Consistent Growth
        • Table Projected U.S. Sales Of Ready-To-Drink Flavored Dairy Beverages: Flavored Milk Vs. Other Flavored Dairy Beverages, 2001-2006
      • Coffee-Milk Initially Grows With Jakada
        • Table Projected U.S. Sales Of Coffee-Milk Drinks, 2000-2006
      • Single-Serve Containers For Cultured Dairy Beverages
        • Table Projected Sales Of Cultured Dairy Beverages, 2001-2006
      • Dairy-Based Shelf-Stable Drinks, Small, Yet Important Segment
        • Table Projected U.S. Sales Of Dairy-Based Shelf-Stable Beverages, 2001-2006
      • Traditional Flavorings Not Going Anywhere
        • Table Projected U.S. Sales Of Flavorings, 2001-2006
      • Cocoa Mixes And Flavorings Show Almost No Growth
        • Table Projected U.S. Sales Of Cocoa Mixes And Milk Flavorings, 2001-2006
      • Other Flavorings Offer Some Hope
        • Table Projected U.S. Sales Of Other Flavorings/Drink Mixes, 2001-2006
  • The Marketers
    • Marketer Diversity
      • All Types Of Marketers
      • Refrigerated Business Is Rather Regional
      • Shelf-Stable Products Benefit Nationally
      • Playing Both Fields
      • Manufacture Or Co-Pack?
      • Dairy Or Beverage Company
      • Soft Drink Companies Want In
        • Table U.S. Flavored Dairy Beverages: Selected Marketers Of Ready-To-Drink Products By Brand And Product Type (20 Marketers)
        • Table U.S. Flavored Dairy Beverages: Selected Marketers Of Flavoring Products By Brand And Product Type (9 Marketers)
    • Consolidation Of Industry
      • The Big Get Bigger
      • When Number-One And Number-Two Dairies Merge
      • Buying Beverage Businesses To Grow Product Portfolio
      • Acquired Similar Brands Create Dilemma
      • Flavorings Stay Still
    • Competitive Overview
      • Hershey Takes On Nesquik
      • Milk Gets Looney
      • Mickey Mouse Milk?
      • Chugs Go National
      • Dean Foods Leads As Top Ready-To-Drink Marketer
        • Table U.S. Supermarket Sales Of Flavored Milk/Eggnog/Buttermilk: Top Three Marketer Sales And Shares, 2000
        • Table U.S. Supermarket Sales Of Flavored Milk/Eggnog/Buttermilk: Top Ten Brands Sales And Shares, 2000
      • Yoo-Hoo On First
      • Latte And Cappuccino Craze
      • Chai Tea Time
      • Cultured Beverages Catch On
        • Table U.S. Supermarket Sales Of Cultured Dairy Beverages: Top Five Brands Sales And Shares, 2000
      • Adding Carbonation
      • Specialty Milks
      • Flavoring Marketers Hold Onto Business
        • Table U.S. Supermarket Sales Of Milk Flavoring/Cocoa Mixes: Top Three Marketer Sales And Shares, 2000
        • Table U.S. Supermarket Sales Of Milk Flavoring: Top Three Brands Sales And Shares, 2000
        • Table U.S. Supermarket Sales Of Cocoa Mixes: Top Five Brands Sales And Shares, 2000
    • Competitive Profile: Austin, Nichols & Co., Inc. New York, New York
      • Company Overview
      • Pernod Ricard Adopts Yoo-Hoo
      • Updating An Image To Boost Sales
      • Cadbury Schweppes Is Potential New Home
    • Competitive Profile: Bravo! Foods International Corp. North Palm Beach, Florida
      • Company Overview
      • What's Up Doc?
      • Two Features To Business Model
      • It's a Looney Business
    • Competitive Profile: The Coca-Cola Co. Atlanta, Georgia
      • Company Overview
      • Reshaping Its Business
      • Project Mother
      • Coffee For Mom (And Dad)
    • Competitive Profile: Dairy Farmers Of America Kansas City, Missouri
      • Company Overview
      • Leading Milk Marketer
      • Manufacturing Product For Top Brands
      • The Borden Business
      • Goodbye To Suiza Venture
      • Hello To Yo-J
    • Competitive Profile: The Dannon Co., Inc. Tarrytown, New York
      • Company Overview
      • U.S. Operations
      • Dedicated To Research
      • Investing In Others
    • Competitive Profile: Dean Foods Co. Franklin Park, Illinois
      • Company Overview
      • Milk Chugs For Everyone
      • Investment In Soy Could Be a Problem
      • Getting To Number-One
        • Table Dean Foods-Owned U.S. Manufacturing Facilities, 2000
    • Competitive Profile: Hershey Foods Corp. Hershey, Pennsylvania
      • Company Overview
      • Battling Mars
      • Hershey, Pennsylvania-It's All About Chocolate
      • Hershey's Affection Towards Milk
    • Competitive Profile: Lifeway Foods, Inc. Morton Grove, Illinois
      • Company Overview
      • Kefir Culture Differences From Yogurt
      • Growing Here And Abroad
    • Competitive Profile: Nestle Usa Glendale, California
      • Company Overview
      • History Built On Dairy
      • The Beverage Division
      • Leader In Beverage Branding
      • New Name, Same Bunny
      • Disney Alliance
    • Competitive Profile: Parmalat Usa Wallington, New Jersey
      • Company Overview
      • Parmalat's U.S. Origins
      • Flavors For Preference
      • Broadening The Product Mix
    • Competitive Profile: Pepsi Co, Inc. Purchase, New York
      • Company Overview
      • Merging And Diverging Brands
      • Moving From Beverage To Food Company
      • Association With Milk Dates Back To Laverne
      • Global Outlook
    • Competitive Profile: Suiza Foods Corp. Dallas, Texas
      • Company Overview
        • Table Suiza Foods-Owned U.S. Manufacturing Facilities, 2000
      • Thinking Nationally, Acting Locally
      • Getting Bigger
    • Competitive Profile: Westfarm Foods Seattle, Washington
      • Company Overview
        • Table Source Of Milk Processed By Westfarm Foods (Number Of Farms): California, Oregon, Idaho, Washington
      • Full Line Of Dairy Products
        • Table Westfarm Food's Key Product Categories (Volume Manufactured During Fiscal Year Ending March 31, 2001)
      • Strategic Brand Partnerships
      • Investing In Technology To Be Competitive
      • Introducing Darigo
    • Marketing And New Products
      • Packaging Drives Innovation
      • Seasonal Products
      • Something For Everyone
        • Table U.S. Flavored Dairy Beverages: Select New Ready-To-Drink Product Introductions, 1999-2001: Part A
        • Table U.S. Flavored Dairy Beverages: Select New Ready-To-Drink Product Introductions, 1999-2001: Part B
        • Table U.S. Flavored Dairy Beverages: Select New Flavoring Product Introductions, 1999-2001
    • Advertising And Promotion
      • Flavored Dairy Beverages Are Out-Advertised
      • Promoting Dairy As Fun
      • Playing Tough
      • Playing Soccer
      • Generic Flavored Milk Campaign
      • Coffee Is Cool
      • Shaking Convenience
      • Samples Of Promotional Materials
  • Distribution And Retail
    • Distribution Overview
      • Retail Distribution Methods
      • Perishable Preferences
      • Direct Delivery Advantages
      • The Cost Of Face-To-Face Business
      • Cutting Costs With Carts
      • Advantages Of Warehouse Delivery
      • Refrigerated Warehousing
      • Acquisitions Result In Enhanced Distribution Efforts
      • Non-Perishable Distribution
      • Leaving The Warehouse
      • Technologies For Refrigerated Fleets
      • Computerizing Distribution For Dairies
      • Smaller Marketers Work Through Brokers
    • Retail Overview
      • Traditional Supermarkets Account For 73.1% Of Retail Sales
        • Table Share Of U.S. Flavored Dairy Beverage Retail Sales By Outlet, 2000
      • Receiving Product
      • Milk Crates Are The Enemy
      • Retailers Profit From Milk
      • Dairy Case Vs. Beverage Cooler
      • Competing With Soft Drinks
      • Secondary Merchandising Creates Incremental Growth
      • Merchandising For Mixes
      • Value-Added Pricing
        • Table U.S. Flavored Dairy Beverages: Suggested Retail Price Of Selected Ready-To-Drink Products
        • Table U.S. Flavored Dairy Beverages: Suggested Retail Price Of Selected Flavoring Products
      • Private Label Pricing
        • Table U.S. Flavored Dairy Beverages: Private Label Vs. Branded
        • Table U.S. Flavored Dairy Beverages: Private Label Vs. Branded
        • Table U.S. Flavored Dairy Beverages: Private Label Vs. Branded
        • Table U.S. Flavored Dairy Beverages: Private Label Vs. Branded
    • Alternative Distribution Channels
      • The Increasingly Popular Warehouse Club Store
      • Membership Benefits
      • Multi-Packs And Family-Size Products
        • Table U.S. Flavored Dairy Beverages: Suggested Club-Store Prices Of Selected Products
      • Milk Means Business For C-Stores
      • C-Stores Are For Impulse Beverages
      • Vending Improves Availability
      • Dairies Evaluate Vending Machines
      • Vending Machine Options
      • Impulse Channels For Mixes
  • The Consumer
    • Consumer Attitudes
      • Consumers Want Convenience
      • Consumers Turn Away From Soft Drinks
      • Milk Consumption Is Up
    • Consumer Use And Demographics
      • Simmons Consumer Survey
      • Simmons Data On Flavored Dairy Beverages
        • Table Percent Of Consumers Who Use Flavored Dairy Beverages By Product Type And Brand, April 2000-March 2001
      • Purchasers Of Chocolate And Other Flavored Milk
        • Table Demographic Characteristics Favoring Purchase Of Flavored Milk: Ready-To-Drink Chocolate Milk Vs. Other Flavored Milk April 2000-March 2001 (U.S. Adults)
      • Milk Makes Coffee Popular With Younger Consumers
        • Table Demographic Characteristics Favoring Purchase Of Coffee-Milk Products: Brewed Espresso/Cappuccino Vs. Coffee-Milk Mix April 2000-March 2001
      • Purchasers Of Milk Flavorings Tend To Be Homemakers
        • Table Demographic Characteristics Favoring Purchase Of Milk Flavorings April 2000-March 2001 (U.S. Adults)
        • Table Demographic Characteristics Favoring Purchase Of Milk Flavorings Powdered Vs. Syrup April 2000-March 2001
      • Differences By Brand
        • Table Demographic Characteristics Favoring Purchase Of Milk Flavorings By Brand April 2000-March 2001
      • Hot Cocoa Mix Demographics As Boring As Category
        • Table Demographic Characteristics Favoring Purchase Of Hot Cocoa Mix April 2000-March 2001
        • Table Demographic Characteristics Favoring Purchase Of Hot Cocoa Mix By Brand April 2000-March 2001
  • Addresses Of Selected Marketers

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