There have been several hybrid dairy/plant-based launches recently – but are consumers convinced and can they be successful? It depends on the product positioning, say marketing experts.
July 14, 2024
The possibilities have convinced food companies to invest in its potential. Danone, for example, introduced a Dairy & Plants Blend baby formula in the Netherlands. Similarly in 2022, Nestlé’s R&D teams developed a nutritious powdered beverage made with a blend of milk, soy, and fruit that was first piloted in Asia. And dairy company Kerry recently launched SMUG, a hybrid range of dairy and oat blends that includes alternatives to milk, cheddar cheese, and butter.
However, some consumer concerns regarding the ultra-processed nature of some plant-based alternatives have carried over to hybrid dairy products, in such a way that is off-putting to consumers.
“Product makers and investors must take the growing scepticism towards over-processed plant-based alternatives very seriously,” said Marit Veenstra, brand strategist for the marketing consultancy, the Healthy Marketing Team (HMT).
“While many highly processed foods are unhealthy, not all processed foods fall into this category. Processing can be necessary for food safety and convenience in today's world. However, the key is to balance processing with health benefits and transparency, ensuring that consumers feel confident and informed about their choices.”
Veenstra’s concern is further supported by the findings of a recent study, conducted by EIT Food and the Future Food Institute, which found that less than half of European consumers trust the food industry (45%).
From a confidence peak in 2021 during Covid-19 (47%), the research team found that confidence tapered off in 2022, reverting to levels last seen in 2020 (44%).
The research also revealed that consumers who eat healthily also tended to eat more sustainably – and the link between sustainability and health raises an interesting question about the long-term viability of hybrid dairy products.
If the intention is to produce a more environmentally friendly product, surely a 100% plant-based cheese/yoghurt is preferable to blending with cow’s milk?
According to Veenstra, brands must communicate all the benefits of hybrids – not just those related to sustainability.
“…to be successful in this category, it is crucial to not just lead with ingredients and let consumers guess why the product is better, but be super clear on the consumer benefit,” said Veenstra. “This can be pleasure, taste, variety, the feel-good [factor] and so on.”
Veenstra added: “Hybrid can indeed be a turnoff for let’s say, vegan consumers. However, I did read that vegan people were analysing the [hybrid] brand SMUG and they were actually positive as they also see that this can help traditional dairy consumers make the step towards plant-based, and its lower environmental impact.”
As the name suggests SMUG (Dairy) and the origin of its slightly tongue-in-cheek branding stems from the feeling consumers get when they choose and discover this product.
The range of blended oat and dairy products, produced by Irish multinational B2C manufacturer Kerry, clearly communicates its environmental and health benefits associated with consuming hybrid dairy over its conventional counterpart. Ingredients in SMUG’s blended oat dairy milk includes chicory root fibre, calcium carbonate, salt, stabiliser, iodine, and vitamin B12.
Peter Wennström, founder and lead consultant at HMT, said brands thinking of entering this category should look to learn from past launches – not all of which have been successful. He referenced an early hybrid product by Arla that was, according to Wennström, “discreetly positioned as lactose-free” and was “a niche in a niche”
“It didn’t live long as could be expected,” he added. “So, to understand the opportunities you must first understand the challenges: the ingredients are the barriers. If you don’t fancy cow’s milk, you won’t buy cow’s milk and if you don’t fancy plant-based, you won’t buy a plant-based milk. So, if you blend the ingredients, you have two groups who are uninterested.
“So, what is the opportunity? Well, it is to look beyond ingredients to benefits consumers could be looking for. With that approach you can increase the potential target group.”
Wennström cited an example of a client, The Green Dairy, that developed a whipping cream by blending oat and fava beans.
“A consumer looking for a plant-based whipping cream doesn’t care about what plant ingredients you have as long as it delivers on function and taste. Functionality is an opportunity. […] We have good examples of this already in the spreads market where spreadable butter was created by blending in rapeseed oil.”
Commenting on the next opportunities within the hybrid sector, Wennström cited functionality combined with health benefits and good taste.
“A milk-based product with lower levels of saturated fatty acids can be created by blending with plant milks leading to a healthier cooking cream for example,” he said. “But it must be led by taste. Otherwise, it’s a niche in a niche.
“If you can develop a product that tastes better and functions better than current alternatives then you have a winner. But you will still not win the vegans, vegetarians, and the plant-based fundamentalists.”
