Market Analysis
Dairy Desserts (Global, 2023)
Introduction
The dairy desserts market is a thriving sub-sector of the food industry, with a wide range of products catering to changing preferences and dietary trends. As consumers become more health-conscious, there has been a noticeable shift towards indulgent yet healthy products. This has led to an expansion in the range of dairy desserts on offer. In this market, products include yogurt-based desserts, puddings, ice creams and cheese-based desserts, each of which appeals to different tastes and age groups. The growing demand for premium and artisanal dairy desserts reflects a growing preference for quality ingredients and unique flavour combinations. Also, the rise of plant-based alternatives has influenced traditional dairy desserts, resulting in a dynamic interplay between dairy and non-dairy options. As the market continues to evolve, it will be important for stakeholders to understand consumer behaviour, preferences and emerging trends, so as to be able to take advantage of the opportunities on offer in this deliciously competitive market.
PESTLE Analysis
- Political
- The 2023 dairy desserts market is influenced by various political factors such as government regulations on food safety and agricultural policy. For example, the European Union has a common agricultural policy, which allocates approximately 50 billion euros a year to support dairy farmers and maintain quality standards. Furthermore, free trade agreements such as the United States, Mexico and Canada Agreement (USMCA) have made it easier to trade dairy products, which has a positive impact on the prices and availability of dairy desserts.
- Economic
- In 2023, the dairy market will be influenced by the inflationary pressure and the trend of consumption. In the first quarter of 2023, the average annual inflation rate in the European Union was 5.6%, which will have an effect on disposable income and purchasing power. The price-quality ratio of consumers is becoming more and more important, and the demand for low-priced dairy desserts will rise. In the United States, the average annual household expenditure on dairy products is 1,200 U.S. dollars, which is relatively stable, and the demand for dairy products is expected to increase.
- Social
- Social trends in 2023 are expected to favor the consumption of dairy products in a more sustainable way. A survey has shown that 68% of consumers are actively looking for natural products and fewer sugars. In addition, the growing popularity of vegetarian diets is leading to a higher demand for dairy alternatives, with 25% of consumers reducing their dairy consumption. This shift is pushing manufacturers of dairy desserts to innovate and diversify their ranges to meet the demands of health-conscious consumers.
- Technological
- The dairy desserts market in 2023 will be largely influenced by technological developments. The development of food processing technology has led to the improvement of the quality and shelf life of dairy desserts. High-pressure processing, for example, has increased the safety of dairy products and increased their shelf life by up to 30 percent. Artificial intelligence has also improved the production efficiency of dairy desserts. According to the report, companies using artificial intelligence have achieved a 15 percent reduction in operating costs through better inventory management and demand forecasting.
- Legal
- In 2023, the dairy desserts market will be influenced by the regulations of labeling and health claims. The Food and Drug Administration has required all food products, including dairy desserts, to comply with the Food Education and Reform Act, which requires clear labeling of nutritional information. In addition, manufacturers may be fined up to $ 10,000 per violation, so they must ensure that the labeling is correct to avoid legal consequences. Intellectual property laws are also important to protect the formula and recipe of the company in the face of competition.
- Environmental
- In 2023, the market for dairy desserts will be dominated by an increasing focus on the environment and sustainable production practices. This is due to the dairy industry’s contribution to greenhouse gas emissions, which is approximately 3.4 per cent of the world’s total. The dairy industry is therefore adopting more sustainable production methods. For example, initiatives to reduce water use have led to a 20 per cent decrease in water consumption per litre of milk produced. In addition, innovations in packaging that reduce plastic waste are gaining ground. By 2025, 40 per cent of dairy dessert brands will have switched to using fully recyclable materials.
Porter's Five Forces
- Threat of New Entrants
- The barriers to entry into the dairy products market are moderate because of the need for significant capital investment in production and distribution. The growing demand for new and healthier desserts will bring new players into the market. The threat of new entrants is therefore moderate.
- Bargaining Power of Suppliers
- The suppliers of the Dairy Desserts market have a low bargaining power, because there are a lot of dairy producers and suppliers of ingredients. Suppliers of the Dairy Desserts market can easily change suppliers without significant costs.
- Bargaining Power of Buyers
- The consumers in the dairy desserts market have a high bargaining power because of the great variety of products and the low switching costs. Competition between the various brands is intense and consumers can easily switch from one brand to another. Therefore, the companies have to keep prices low and to focus on product differentiation.
- Threat of Substitutes
- The threat of substitutes in the dairy desserts market is high, because there are a number of alternatives, such as non-dairy desserts, frozen desserts and healthy snacks. This threat is further increased by the growing trend towards vegetarian diets and a healthy way of eating.
- Competitive Rivalry
- Competition is high in the Dairy Desserts market, with numerous established brands and new entrants competing for market share. Companies are constantly launching new flavors and product lines to attract consumers, which has resulted in a fierce price competition and a plethora of marketing strategies.
SWOT Analysis
Strengths
- Strong consumer demand for indulgent and comfort foods.
- Diverse product range including yogurts, puddings, and ice creams.
- Established brand loyalty among consumers for traditional dairy desserts.
Weaknesses
- High production costs associated with dairy sourcing and processing.
- Perception of dairy desserts as unhealthy due to high sugar and fat content.
- Limited shelf life compared to non-dairy alternatives.
Opportunities
- Growing trend towards healthier and low-calorie dessert options.
- Expansion into plant-based and lactose-free dairy dessert segments.
- Increasing online sales channels and e-commerce opportunities.
Threats
- Rising competition from non-dairy and plant-based dessert alternatives.
- Fluctuations in milk prices affecting production costs.
- Changing consumer preferences towards healthier eating habits.
Summary
Among the defining characteristics of the dairy desserts market in 2023 are a strong demand from consumers and brand loyalty. However, high production costs and health concerns will be a challenge to the market growth. Opportunities include a growing trend towards healthier dairy desserts and the development of plant-based dairy desserts. Threats include the threat of rising competition and volatile raw material prices.
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