Omega-3 Eggs, Fortified Yogurt Boost Functional Dairy Sales

ROSEANNE HARPER

NEW YORK — In a new study of functional foods, dairy stood out as the one segment of the category that continues to show healthy sales growth.

The segment, which includes omega-3-enhanced eggs and yogurt fortified with extra cultures, saw sales jump nearly 14% from 2004 to 2006, the only segment to post double-digit growth, according to new data from the Mintel Group. As a whole, the functional food category grew only 2.9%.

Lack of innovation in functional foods between 2004 and 2006 accounted for the sluggish growth, with the dairy category being the exception, researchers concluded.

“I was not at all surprised by the fact that there is a market for value-added eggs,” said David Lockwood, director of Mintel Reports.

With conventional eggs being inexpensive to start with, consumers are willing to pay a premium for an alternative that promises “to be lower in cholesterol and fat and higher in vitamins and omega-3s,” Lockwood said.

Functional products made up 27% of dairy dollar sales in 2005, compared to 22% in 2001, other Mintel studies have shown.

Researchers theorized that marketers of fortified yogurt have done a good job educating consumers about the added ingredients and benefits.

“I also think it is starting to succeed because there is not a huge price premium on most such products, a change from past years,” Lockwood said.

“That's the problem with the dairy spread items,” he said. “They are still way overpriced for the added value they deliver.”

Fortified juices posted sluggish sales, and that limited the growth of functional dairy foods, researchers said.

“Fortified juice is down because it's part of a very large category that's competing with many, many newer beverages, whether fortified or not, and it is unfairly taking a hit for having too much sugar,” Lockwood said.