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For the main theme of our newsletter this quarter we turn our focus to the explosion of the probiotic market. This exciting and growing trend is fueling innovation in retail and food service in 2007 and beyond. We too have been busy responding to client demands for probiotic solutions, and here we share a profile of a recent concept launch in this market space on which The Culinary Edge team has partnered.
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Probiotics and Live Active Cultures Grow Beyond the Dairy Aisle
Probiotics By Numbers
| 18% of Consumers: | Aware of the term ‘probiotic’ in 2006 (compared with 2.2% in 2004) |
| 2 Million People: | Number of consumers that use probiotics (about two-thirds of whom are female) |
| 400 US Patents: | Currently in process that cite the term ‘probiotic’ in their application |
| $1.1 Billion: | Anticipated dollar value of the US probiotic market in 2010 |
| 8,352: | Yogurt and probiotic drinks anticipated to launch in 2007 in the global retail market, almost one-third of which will be in the U.S. |
"Consumers are more attracted to the buzz than to actual benefitsî Virginia Lee, Analyst at Euromonitor International in Chicago. This is typical of an early-phase trend, as basic awareness grows it is likely that consumers will become savvier about understanding and quantifying the health benefits.
The Market Opportunity
In January the New York Times reported that the fastest way to consumersí hearts may be through their troubled stomachs. Despite the challenges and pitfalls of marketing digestive health to Americans, packaged foods companies such as Dannon and Yakult have taken a product with what was once niche appeal in the natural channel, to the mainstream.
Selling products on the basis of digestive health is notoriously tricky in the US, as evidenced by the California Prune Boardís name change to the California Dried Plum Board. However, probiotic foods and drinks have long been popular in Asia, where there is a legacy of consuming food for functional benefits and in Europe, where eating yogurt, kefir and live active culture-based foods is an established tradition. In the US, where typically yogurt consumption has been low, the buzz around the phenomenon seems to have hit a tipping point towards the mainstream with a rush of new products launched on the retail market in the US that tout the benefits of probiotics.
As the US consumerís taste for a more tart yogurt flavor profile has grown, the foodservice sector has responded quickly. In Los Angeles, Red Mango, Pinkberry and an army of emulators have rapidly expanded the presence of these updated yogurt shops across the urban landscape, and they have their eyes on a suburb near you soon. The new approach to yogurt updates us from the 80ís ëfrozen yogurt parading as ice creamí to a more tart, natural yogurt flavor and all the health benefit claims that yogurt carries. TCBY quickly took notice, and has been testing their own fresh and frozen yogurt concept called ëYovanaí in select locations for over a year.
Red Mango has embraced live and active cultures as part of its product platforms.
Another element to this trend is that probiotics are beginning to reach out beyond yogurt and into many convenient retail forms such as non-dairy beverages, other dairy products and even shelf stable snacks. New products launched in the past few months and of interest are:
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Attune Foods Wellness Bars for digestive health and immunity |
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Yoplaitís YoPlus for digestive health from General Mills |
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Knudsenís Cottage Cheese carrying the ìLiveActive: for digestive healthî banner |
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Kraft Cheese carrying the ìLiveActive: for digestive healthî banner |
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Probugs Childrenís probiotic drinks |
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Kombucha Wonder Drink, a West-Coast cult favorite for the last several years, has been consumed in China since 221 BC and is just now gaining in popularity in the US. The ìWonder Drinkî product builds on the brewed, sweetened and fermented tea concept and matches it with fruit flavors, such as Asian Pear and Ginger as seen here. |
Overview: Probiotic Innovation and Culinary Development for Fraiche, a Bay Area Retail Start-up
Profile
Inspired by the success of frozen yogurt chains in Los Angeles and New York City, a team of Bay Area entrepreneurs sought a way to participate in this more authentic 'yogurt' update of the traditional frozen dessert. While the likes of existing offerings such as Pinkberry were being dubbed ëcrackberryí among the 18-25 year-old demographic, the entrepreneurs suspected that the low barrier to entry and quick acceptance by the general public would make this a fleeting trend. In the hopes of making a fad-proof, high-integrity product, the team approached The Culinary Edge for assistance in uncovering what would differentiate their concept and for full concept development support.
Challenge
The start-up team at Fraiche knew they could differentiate their retail concept from their rivals through an offering that reflected the highest integrity possible. Within the framework of their operational platform and resources, the key question was whether the product should be sourced from reliable partners or controlled entirely and manufactured on site. Either way, the concept required an impactful, high integrity probiotic fresh yogurt product and retail experience.
Solution
The Culinary Edge team worked alongside the Fraiche entrepreneurs through its disciplined process to evaluate suppliers, analyze operations and equipment needs and an extensive kitchen testing program. With a deep bank of knowledge and learnings about making yogurt, The Culinary Edge’s final retail concept for Fraiche integrated a full yogurt making facility on site and centered around selling both fresh and frozen yogurt.
