I. Executive Summary

Market Size and Growth
• Dairy-Based and Dairy-Alternative Combine at $1.2 Billion in 1997
• Table 1-1: U.S. Retail Sales of Dairy-Based and Dairy-Alternative Beverage Products, 1993-2002 (dollars)

Dairy-Based Beverages
• Two Product Categories
• Retail Sales Near $1 Billion in 1997
• Single-Serve Revolution in Dairy-Based Beverages
• Flavored Milk on the Upsurge
• Flavored Milk, Without the Fat
• Prospects for Milk Flavorings
• Retail Sales to Approach $1.3 Billion by 2002
• Table 1-2: U.S. Market for Dairy-Based Beverages: Retail Sales by Category, 1993-2002 (dollars): Flavored Beverages, Milk Flavorings
• Two Levels of Marketers
• Private Label a Major Player
• Market Consolidation Continues
• Robbing Peter
• Nestlé Claims 13% of Flavored Milk Sales
• Picking a Target
• Hershey Top Advertiser at $11 Million Plus
• Two Distribution Methods
• The Dairy and the Computer
• Supermarkets the Main Sales Venue
• Retail Pricing
• Purchasers of Chocolate and Other Flavored Milk
• Figure 1-1: Consumer Penetration Rates for Dairy-Based Beverage Products by Type, 1998 (percent): 12 Product Types
• 41% Purchase Milk Flavorings

Dairy-Alternative Beverages
• Drinks that Replace Dairy Beverages
• Retail Sales at $173 Million in 1997
• Dairy-Alternative Beverages Move Toward Mainstream
• Overall Market to Reach $267 Million by 2002
• Table 1-3: The U.S. Market for Dairy-Alternative Beverage Products: Retail Sales, 1993-2002 (dollars)
• Soy Milk Claims 57% of Market
• A Handful of National Marketers
• Eden Foods Claims 40% of Soy Milk Segment
• Market Shifts to Domestic Production
• Factors Conspire to Lower Prices
• Marketers Compete Through New Products
• Eden Foods the Leading Consumer Advertiser
• Two Distinct Channels
• Home Base in Health and Natural Food Stores
• Most Products Not in Mass Market
• Consumer Interest in Soy Milk on the Up-Swing
• Products Most Commonly Purchased on Weekly Basis

Scope and Methodology
• The Dairy-Based Beverages Market
• The Dairy-Alternative Beverages Market
• Report Methodology

II. Market Overview

Definition of Markets
• The Dairy-Based Beverages Market
• The Dairy-Alternative Beverages Market
• Figure 2-1: U.S. Retail Sales of Dairy-Based and Dairy-Alternative Beverage Products, 1993-1997 (dollars)

Market Size and Growth
• Dairy-Based and Dairy-Alternative Combine at Nearly $1.2 Billion in 1997
• Dairy-Based Retail Sales Near $1 Billion
• Table 2-1: U.S. Retail Sales of Dairy-Based and Dairy-Alternative Beverage Products, 1993-1997 (dollars)
• Dairy-Alternative Retail Sales at $173 Million

Factors to Market Growth
• Single-Serve Revolution in Dairy-Based Beverages
• Flavored Milk on the Upsurge
• Table 2-2: U.S. Volume Sales of Flavored Milk as Percentage of Total Milk Sales, 1987-1997 (percent)
• Flavored Milk, Without the Fat
• Table 2-3: Total U.S. Volume Sales of Flavored Milk, 1987-1997 (pounds)
• Prospects for Milk Flavorings
• Dairy-Alternative Beverages Move Toward Mainstream

Projected Market Growth
• Dairy-Based and Dairy-Alternative to Exceed $1.5 Billion by 2002
• 5% Projected Growth Rates for Dairy-Based Beverages
• Table 2-4: Projected U.S. Retail Sales of Dairy-Based and Dairy-Alternative Beverage Products, 1997-2002 (dollars)
• 9% Projected Growth Rates for Dairy-Alternative Products

III. The Market For Dairy-Based Beverages

Introduction
• Scope of Market
• Brief History of Market
• Milk Is Traditional, Flavorings Are Newer
• Instant Breakfasts Are Sign of Time

Product Definition
• Two Product Categories
• Flavored Beverages
• Milk Flavorings

Government Regulation
• Federal Regulations
• Congress Phases Out USDA Price Stabilization
• FDA Changes Milk Labeling
• Nutrition Facts
• State Regulations

Packaging and Labeling
• Metamorphosis in Milk Containers
• The Trouble with Gables
• Jazzing Up the Label
• Fewer Stirrings in Milk Flavoring Packaging
• Figure 3-1: U.S. Retail Sales of Dairy-Based Beverage Products, 1993-1997 (dollars)

Market Size and Growth
• Retail Sales Near $1 Billion in 1997
• Table 3-1: U.S. Retail Sales of Dairy-Based Beverage Products, 1993-1997 (dollars)
• Flavored Beverages at $625 Million
• Milk Flavorings at $357 Million
• Table 3-2: U.S. Retail Sales of Dairy-Based Beverage Products by Category: Flavored Beverages vs. Milk Flavorings, 1993-1997 (dollars)
• Flavored Milk Sales Increase 7.2% in 1997
• Table 3-3: U.S. Retail Sales of Flavored Dairy-Based Beverage Products: Flavored Milk vs. Other Flavored Dairy-Based Beverages, 1993-1997 (dollars)
• Refrigerated Milkshake Sales Jump 8.0%
• Table 3-4: U.S. Retail Sales of Refrigerated Milkshakes, 1993-1997 (dollars)
• Yogurt Drink Sales Edge Up to $4 Million
• Table 3-5: U.S. Retail Sales of Yogurt Drinks, 1993-1997 (dollars) Coffee-and-Milk Drink Sales Not Yet Measured
• Lackluster Returns in Milk Flavoring Segments
• Table 3-6: U.S. Retail Sales of Milk Flavorings: Cocoa Mixes vs. Other Milk Flavorings, 1993-1997 (dollars)

Market Composition
• Flavored Milk Accounts for Most of Market
• Figure 3-2: U.S. Dairy-Based Beverages Market: Share of Dollar Sales by Product Type, 1997 (percent): Flavored Milk, Cocoa Mixes, Other
• Supermarkets the Main Sales Venue
• Figure 3-3: U.S. Dairy-Based Beverages Market: Share of Dollar Sales by Retailer Type, 1997 (percent): Supermarkets, Smaller Grocery Stores, Other
• Chocolate Milk the Biggest Flavor
• Figure 3-4: Share of U.S. Retail Sales of Flavored Milk by Flavor, 1997 (percent): Chocolate, Strawberry, Other
• Sales by Season
• Figure 3-5: Share of U.S. Supermarket Sales of Whole Milk by Quarter, June 1997- June 1998 (percent)
• Figure 3-6: Share of U.S. Supermarket Sales of Packaged Milkshakes/Non-Dairy Drinks by Quarter, June 1997- June 1998 (percent)
• The Hot Chocolate Seasons
• Figure 3-7: Share of U.S. Supermarket Sales of Chocolate Milk Flavoring/Cocoa Mixes by Quarter, June 1997- June 1998 (percent)
• Market Skews to Midwest, Northeast
• Table 3-7: Regional Distribution Indices for Consumption of Dairy-Based Beverages: By Product Type, 1998 (indices): 17 Product Types

Factors to Market Growth
• Rejuvenating a Mature Market
• Flavored Milk Goes Modern
• New Look Has Drawbacks
• Milk, For Your Health
• Milkshakes Change with Times
• Yogurt Drinks and the Health Angle
• A Fresh Option in Coffee-and-Milk Drinks
• Milks Flavorings Stick to the Formula
• Cocoa Not Booming, But Growing Up
• Figure 3-8: Projected U.S. Retail Sales of Dairy-Based Beverage Products, 1997-2002 (dollars)

Projected Market Growth
• Retail Sales to Approach $1.3 Billion by 2002
• Table 3-8: Projected U.S. Retail Sales of Dairy-Based Beverage Products, 1997-2002 (dollars)
• Healthy Increases for Flavored Beverages
• Limited Growth for Milk Flavorings
• Table 3-9: Projected U.S. Retail Sales of Dairy-Based Beverage Products by Category: Flavored Beverages vs. Milk Flavorings, 1997-2002 (dollars)

Marketer Overview
• Many Marketers, But Few Are National
• Two Levels of Marketers
• Private Label a Major Player
• Table 3-10: U.S. Market for Dairy-Based Beverage Products: Selected Marketers by Brand Line and Product Type

The Competitive Situation
• Market Consolidation Continues
• Robbing Peter
• Nestlé Claims 13% of Flavored Milk Sales
• Table 3-11: U.S. Supermarket Sales of Flavored Milk/Eggnog/Buttermilk: Marketer Sales and Shares, 1997 (dollars and percent): 5 Marketers
• Nestlé Claims 44% of Cocoa Mixes
• Table 3-12: U.S. Supermarket Sales of Chocolate Milk Flavoring/Cocoa Mixes: Marketer Sales and Shares, 1997 (dollars and percent): 4 Marketers

Competitive Profile: Dairy Farmers of America
• Company Overview
• DFA Holds Top Brand Names
• Borden Unburdens Dairy Division
• Borden Goes Single-Serve
• Borden Sales Drop Slightly
• Starbucks in Supermarkets

Competitive Profile: Dean Foods Co
• Company Overview
• Not the New Kid on the Block
• Dairy and More
• Chugs to the Rescue
• Can One Product Save an Industry?

Competitive Profile: Hershey Foods Corp.
• Company Overview
• 100 Years of Chocolate Know-How
• The Battle Against Mars
• The Dairy-Beverage Lineup

Competitive Profile: Nestlé S.A
• Company Overview
• It Started with Milk
• Beyond Chocolate and Coffee
• Recent Acquisitions
• Tops in Flavored Milk

Competitive Profile: Novartis AG
• Company Overview
• Drugs, Nutrition, and Pesticide
• A Political Past
• Ovaltine for Sale?

Marketing and New Product Trends
• The Singles Scene
• Chocolate Benefiting Most from Single-Serve
• Picking a Target
• Pitching Nutrition to Adults
• Something for Everyone
• Table 3-13: U.S. Dairy-Based Beverages Market: Selected New Product Introductions, 1997-1998

Advertising and Promotion
• Hershey Top Advertiser at $11 Million Plus
• Milk Still Marketed to Mom
• Selling Health
• A Chocolate Mustache
• That Darn Rabbit
• Yoo-Hoo Gets Warped
• Coupons Rarely for Milk
• Venues for Trade Advertising
• Products on Parade
• Samples of Promotional Materials

At the Distribution Level
• Two Distribution Methods
• Direct Delivery Advantages
• Drawback: DSD Often Costly
• The Dairy and the Computer
• Banking on Category Management

At the Retail Level
• Supermarkets Account for 85% of Sales
• Display of Dairy-Based Beverages
• Retail Pricing
• Milk Supply and Demand
• The Name Brand vs. Private Label Battle

The Consumer
• Simmons Consumer Survey
• Simmons Data on Dairy-Based Beverages
• Purchasers of Chocolate and Other Flavored Milk
• Singles Slant for Coffee-and-Milk Drinks
• 41% Purchase Milk Flavorings
• Syrup vs. Powdered
• Hershey's Products Draw 27%
• Nestlé Products Draw 23%
• Demographics for Ovaltine and Swiss Miss
• Purchasers of Other Brand Milk Flavorings
• Age Skew for Carnation and Pillsbury Instant Breakfasts
• Table 3-14: Purchaser Overview for Dairy-Based Beverage Products by Type, 1998 (percent, year, dollars): 17 Product Types
• Table 3-15: Demographic Characteristics Favoring Purchase of Dairy Beverages by Type, 1998 (U.S. Principal Shoppers): Chocolate Milk, Other Flavored Milk, Regular/Whole Milk
• Table 3-16: Demographic Characteristics Favoring Purchase of Coffee Products by Type: Ready-to-Drink Iced Cappuccino vs. Espresso/Cappuccino, 1998 (U.S. principal shoppers)
• Table 3-17: Demographic Characteristics Favoring Purchase of Milk Flavorings, 1998 (U.S. Principal Shoppers)
• Table 3-18: Demographic Characteristics Favoring Purchase of Milk Flavorings by Type: Powdered vs. Syrup, 1998 (U.S. Principal Shoppers)
• Table 3-19: Demographic Characteristics Favoring Purchase of Hershey Milk Flavoring Products by Type, 1998 (U.S. Principal Shoppers)
• Table 3-20: Demographic Characteristics Favoring Purchase of Nestlé Milk Flavoring Products by Type, 1998 (U.S. Principal Shoppers)
• Table 3-21: Demographic Characteristics Favoring Purchase of Milk Flavorings by Brand: Ovaltine vs. Swiss Miss, 1998 (U.S. Principal Shoppers)
• Table 3-22: Demographic Characteristics Favoring Purchase of Other Brand Milk Flavorings, 1998 (U.S. Principal Shoppers)
• Table 3-23: Demographic Characteristics Favoring Purchase of Instant Breakfast Products by Brand: Carnation vs. Pillsbury, 1998 (U.S. Principal Shoppers)

IV. The Market For Dairy-Alternative Beverages

Introduction
• Scope of Market
• An Emerging Market
• From the Far East to Franklin
• Emergence of Soy Beverages
• Rice Beverages as Alternatives to Soy

Product Definition
• Drinks that Replace Dairy Beverages
• Making Soy Milk
• Making Rice Milk
• Nut and Potato Milk
• Evolutions in Packaging

Government Regulation
• The FDA and the FTC
• Labeling Nutrition
• Figure 4-1: U.S. Retail Sales of Dairy-Alternative Beverage Products, 1993-1997 (dollars)

Market Size, Growth, and Composition
• Retail Sales at $173 Million in 1997
• Table 4-1: U.S. Retail Sales of Dairy-Alternative Beverage Products, 1993-1997 (dollars)
• Soy Milk Claims 57% of Market
• Figure 4-2: U.S. Dairy-Alternative Beverages Market: Share of Retail Dollar Sales by Product Type, 1997 (percent): Soy Milk, Rice Milk, Other
• Health Food Sector Claims 75% of Sales
• Figure 4-3: U.S. Dairy-Alternative Beverages Market: Share of Dollar Sales by Retailer Type (percent): Health and Natural Food Stores, Supermarkets, Other

Factors to Market Growth
• A Growing Awareness of Soy
• Maturing Population and Interest in Nutrition
• Medical Community Accepts Plant-Based Diet
• Soy, Heart Disease, and Cancer
• Impact of Bovine Growth Hormone
• Vegetarian Trend Among Younger Adults
• Influences from the East
• Minority Markets and Lactose Intolerance
• Health Food Sector a Rising Tide
• Innovative New Products
• Remaining Hurdles

Projected Market Growth
• Overall Market to Reach $267 Million by 2002
• Table 4-2: U.S. Retail Sales of Dairy-Alternative Beverage Products, 1997-2002 (dollars)

The Competitive Situation
• A Handful of National Marketers
• Table 4-3: U.S. Market for Dairy-Alternative Beverage Products: Selected Marketers by Brand Line and Product Type (16 Marketers)
• Eden Foods Claims 40% of Soy Milk Segment
• Figure 4-4: Marketer Shares of U.S. Sales of Soy Milk, 1997 (percent): Eden Foods, Westbrae Natural Foods, Vitasoy, Other
• Figure 4-5: Marketer Shares of U.S. Sales of Rice Milk, 1997 (percent): Imagine Foods, Westbrae Natural Foods, Eden Foods
• EdenSoy's Success Spurs Competition
• Market Shifts to Domestic Production
• Factors Conspire to Lower Prices
• Marketers Compete Through New Products
• Table 4-4: U.S. Dairy-Alternative Beverages Market: Selected New Product Introductions, 1997-1998 (6 Marketers) Fortification Important to Sales
• A Case for Vegetables
• Joining the Dairy Case
• Flavor vs. Fashion in Packaging
• Mass-Market Interest Still Limited

Competitive Profile: Eden Foods, Inc
• Company Overview
• Product Lineup
• Dairy-Alternative Beverages

Competitive Profile: Hain Food Group, Inc
• Company Overview
• Labels and Alliances
• Brands not Buildings
• Rice Cakes and Acquisitions
• Product Cross-Promotions
• Dozens of Dairy Alternatives

Competitive Profile: Imagine Foods, Inc
• Company Overview
• Expansion Efforts

Competitive Profile: Vitasoy (USA), Inc
• Company Overview
• Vitasoy (USA)
• A Better Soy Beverage
• Soy Milk Setback in Hong Kong

Competitive Profile: White Wave, Inc
• Company Overview
• Product Lineup
• Innovative Vegetarian Fare
• Downplaying Soy

Advertising and Promotion
• Eden Foods the Leading Consumer Advertiser
• Good Health Is Overlying Theme
• Advertising to the Lactose Intolerant
• Taking on the Mainstream
• Consumer Promotions Not Heavily Used
• Three Key Trade Publications
• Trade Ads Run at Conventions
• Samples of Promotional Materials

At the Distribution Level
• Two Distinct Channels
• Four Types of Distribution Systems
• Consolidation Creates Two Major Distributors
• Health and Natural Food Distributors
• Other Large Health and Natural Food Distributors
• The Role of Distributors
• Forward Buying by Distributors
• Margins for the Two Channels Differ
• By-Passing the Distributor
• Brokers Aid Marketers and Retailers

At the Retail Level
• Home Base in Health and Natural Food Stores
• Most Products Not in Mass Market
• Shelf vs. Case
• In-Store Demos Top Promotional Activity

The Consumer
• Interest in Soy Milk on the Up-Swing
• Products Most Commonly Purchased on Weekly Basis
• About 26 Million U.S. Adults Use Soyfoods
• Natural Foods Shoppers More Likely to Purchase Soy
• Nutrition Important in Food Choices
• Americans Try to Eat Healthfully
• Improving Health Is Primary Motivation
• Beyond the Counter-Culture
• The Simmons Consumer Survey
• 6% of Adults Are Regular Health and Natural Food Customers
• More Women than Men Are Customers
• Boomers Comprise Bulk of Customers

Appendix I: Examples Of Consumer Advertising And Promotions (available in bound editions only)

Appendix II: Addresses Of Selected Marketers