• Scope and Methodology
• Report Methodology


• The Products
  • Two Main Categories
  • Milk Battles Boring Image
  • Soy Beverages Mimic Milk
  • Targeting Diverse Consumer Interests
  • Formulation Variables and Value-Added Characteristics
  • Single-Serve Packaging
  • Extended Shelf Life
  • Refrigerated Dairy Alternatives Build Awareness
  
  
• Size and Growth of Market
  • Total Market Reached $2.9 Billion in 2003
  • Table 1-1: U.S. Sales of Flavored Dairy Beverages and Flavorings, 1999-2001*
  • Table 1-2: U.S. Sales of Flavored Dairy and Flavored Dairy Alternative Beverages, 2002-2003*
  • Table 1-3: Projected U.S. Sales of Flavored Dairy/Dairy Alternative Beverages, 2003-2008
  • Flavored Milk Outlook: Competitive but Positive
  • Shelf-Stable Dairy Drinks Less Predictable
  • Ready-to-Drink Packaged Coffee Still Has Buzz
  • Drinkable Yogurt Takes Off
  • Total Flavored Dairy Alternative Drinks $818.2 million in 2003
  • Table 1-4: 2003 Sales by Flavored Dairy Segment, Percentage of Total Category Sales
  • Figure 1-1: 2003 Sales by Flavored Dairy Segment, Percentage of Total Category Sales
  • New Product Introductions
  
  
• Packaging and Processing Trends and Innovations
  • Single-Serve Shakes Up Sales
  • Plastic Single-Serve Containers Proliferate
  • Single-Serve Universe
  • Single-Serve Packaging Improves Margins, Reduces Trial Risk
  • Multi-packs Boost Sales
  • Processing Trends Multiply Options
  • Dean Foods Wins Approval for Aseptic Innovation
  • Trade-Offs With Shelf Life Improvements
  • Dairy Alternatives Reverse Trend, Succeed With Refrigeration
  • Can Milk and Fizz Co-exist?
  • Flavor Trends and Innovations
  • Sweeteners: Sucralose Trumps Aspartame
  
  
• Marketing Trends and Innovations
  
  • Branding Strategies Help Redefine, Sell Milk
  • “Milk With Attitude”
  • Beverages for “Healthy Lifestyles”
  
  
• Consumer Trends
  • Adults Getting Heavier
  • Sounding the Alarm on Childhood Obesity
  • Shifting from Soft Drinks to Dairy
  • Can Flavored Dairy-Based Drinks Fill the Bill?
  • Low-Carb a Significant Trend
  • Flavored Soymilk in Low-Carb Diets
  • Health, Wellness, and Aging Boomers
  • The Diversifying American Population
  • $644 Billion Spending Power in 2003
  • Teen Consumption Goes Up
  • Kids Drinking More Milk, Too
  • Adults Find Convenience Convincing
  • Who Are the Soymilk Drinkers?
  
  
• The Marketers
  • Top Dog: Dean Foods
  • National Dairy Holdings — Consolidation and Speculation
  • New Competitors from Carbonated Soft Drink Industry
  • Small Innovators Still Make Waves
  
  
• Distribution
  • Supermarkets Primary Sales Channel
  • Promising Vending Results Inspire Processors
  • Convenience Store Channel — Beyond the Gallon
  • Flavored Milk Sales Projected to Grow in C-Stores
  • Single-Serve Milk Boosts Sales, Offers Fast-Food Options
  
  
• Conclusion
  
  • Health Concerns Support Milk, Soy Intake
  • Proliferation of Choices

Chapter 2: The Products

• Milk Drinks Battle Boring Image
• Soy Beverages Mimic Milk
• Targeting Diverse Consumer Interests
• Market Segments
• Flavored Milks
• Flavored Milk Drinks - Blended
• Flavored Milk Drinks - Carbonated
• Flavored Milk/Coffee Blends
• Flavored Dairy Alternatives — Soy
• Flavored Dairy Alternatives — Other Than Soy
• Shakes and Smoothies
• Drinkable Yogurt
• Ethnic-style Drinks
• Formulation Variables and Value-Added Characteristics
• Reduced-Fat, Low-Fat and Fat-Free
• Low-Carb Craze
• Lactose-free
• The Organic Segment
• Organic Dairy Grows Despite Flat Conventional Market
• Organic Standards
• Safety, Health Concerns Drive Organic Growth
• Organic Adds Flavors, Convenience
• Fortification
• Packaging for a Modern World
• Single-Serve Packaging
• Multi-packs of Single-Serve Beverages
• Extended Shelf Life
• Refrigerated Dairy Alternatives Build Awareness

Chapter 3: Size and Growth of the Market

• Market Reached $2.9 Billion in 2003
• Table 3-1: U.S. Sales of Flavored Dairy Beverages and Flavorings, 1999-2001*
• Table 3-2: U.S. Sales of Flavored Dairy and Flavored Dairy Alternative Beverages, 2002-2003*
• Table 3-3: Projected U.S. Sales of Flavored Dairy/Dairy Alternative Beverages, 2003-2008
• Figure 3-1: Projected U.S. Sales of Flavored Dairy/Dairy Alternative Beverages, 2003-2008
• Table 3-4: 2003 Sales by Flavored Dairy Segments, Percentage of Total Category
• Figure 3-2: 2003 Sales by Flavored Dairy Segment, Percentage of Total Category


• Flavored Milk and Dairy-Based Beverages
  • Chocolate Milk Just the Beginning
  • Making Milk Hip and Exciting
  • New Distribution Outlets Build Market
  • Changing Market Influences Estimates of Size
  • Table 3-5: IRI-Tracked Retail Sales of Refrigerated Flavored Milk, 1999 - 2003 (includes eggnog and buttermilk)
  • Table 3-6: U.S. Sales of Milk (Overall), 1999 - 2003
  • Packaged Facts Historical Data: Flavored Milk and Dairy-Based Shelf-Stable Beverages, 1997 - 2001
  • Table 3-7: U.S. Sales of Flavored Milk 1997 - 2002
  • Table 3-8: U.S. Sales of Dairy-Based Shelf-Stable Beverages. 1997 - 2002
  • 2003 U.S. Sales for Flavored Milk Reach $1,337 Million
  • Table 3.9: U.S. Sales of Selected Leading Refrigerated Flavored Milk Marketers, 2002-2003
  • Outlook: Competitive but Positive
  • Table 3-10: Projected U.S. Sales of Flavored Milk, 2003-2008
  • Figure 3-3: Projected U.S. Sales of Flavored Milk, 2003-2008
  • Shelf-Stable Dairy-Based Drinks a Wild Card
  • Shelf Stable Dairy-Based Beverages Reach $135.7 Million in 2003
  • Table 3-12: U.S. Projected Sales of Shelf-Stable Dairy Beverages 2003 - 2008
  • Figure 3-4: U.S. Projected Sales of Shelf-Stable Dairy Beverages 2003 - 2008
  
  
• Ready-to-Drink Packaged Coffee
  • Frappuccino Still Segment Leader
  • Table 3-13: Total U.S. Sales of Ready-to-Drink Coffee Beverages by Market, 1999-2003
  • RTD Coffee Beverages Projected to Reach $598.9 Million
  • Table 3-14: Projected Total U.S. Sales of Packaged Ready-to-Drink Coffee Beverages by Market, 2003 - 2008
  • Table 3-15: U.S. Sales of Leading RTD Packaged Coffee Beverage Brands, 2002-2003
  
  
• Drinkable Yogurt and Cultured Dairy Beverages
  • Drinkable Yogurt Making the Spoon Obsolete
  • Growth Exceeds Projections
  • Table 3-16: U.S. Sales of Leading Refrigerated Cultured Dairy Beverages Brands, 2002 - 2003
  • Room for Expansion
  • Table 3-17: U.S. Sales of Cultured Dairy Beverages, 1999 - 2003
  • Table 3-18: Projected Sales of Cultured Dairy Beverages, 2003 - 2008
  • Figure 3-5: Projected Sales of Cultured Dairy Beverages, 2003 - 2008
  • Leading Marketers Sell Health, Fitness, Functionality
  
  
• Flavored Dairy-Alternative Beverages
  • White Wave Transforms Category
  • Other Market Leaders
  • Organic Matters
  • Flavored Category
  • Calculating Size of Market for Dairy Alternative Beverages
  • Table 3-19: U.S. Sales of Shelf-Stable Non-Fruit Drinks*, 1999 - 2003
  • Table 3-20: U.S. Sales of Refrigerated Milk Substitutes, Soymilk, Kefir
  • Table 3-21: U.S. Sales of Refrigerated Milkshakes/Non-Dairy Drinks
  • Total Flavored Dairy Alternative Drinks $818.2 million in 2003
  • Table 3-22: Projected Sales of Flavored Dairy Alternatives 2003 - 2008
  • Figure 3-6: Projected Sales of Flavored Dairy Alternatives 2003 - 2008
  • Table 3-23: U.S. Sales of Selected Dairy-Alternative Beverage Marketers, 2002-2003
  • Number of New Product Introductions

Chapter 4: Market Drivers and Factors Affecting Growth

• Packaging and Processing Trends and Innovations
• Single-Serve Shakes Up Sales
• Milk Chug Revolution
• Plastic Single-Serve Containers Proliferate
• Single-Serve Packaging Suits Convenience Store Market
• Horizon Organic Opts for Tetra Prisma Aseptic Single-Serve
• Single-Serve Universe
• Single-Serve Packaging Improves Margins, Reduces Trial Risk
• Multi-packs Boost Sales
• Processing Trends Multiply Options
• Glossary of Terms Related to Beverage Shelf Life
• Dean Foods Wins Approval for Aseptic Innovation
• Trade-Offs With Shelf Life Improvements
• Dairy Alternatives Reverse Trend, Succeed With Refrigeration
• Can Milk and Fizz Co-exist?


• Flavor Trends and Innovations
  • Chocolate Rules
  • Table 4-1: Share of Flavored Milk Sales by Flavor
  • Bold Flavor Names for Teens, Young Adults
  • Fruit Flavors Smoothies, Drinkable Yogurt
  • Soy-Based Drinks Run the Gamut of Flavors
  • Ready-to-Drink Coffee, Tea Beverages Add Flavors Too
  • Non-Soy Dairy Alternatives Go Wild With Flavor
  • Ethnic Flavors
  • Sweeteners: Sucralose Trumps Aspartame
  
  
• Marketing Trends and Innovations
  • Branding Strategies Help Redefine, Sell Milk
  • “Milk With Attitude”
  • Cartoons, Contours for Children
  • Moving Up to Superheroes
  • Amped-Up Adolescence: Swerve, Raging Cow, and More
  • Adventures in Internet Marketing
  • Beverages for “Healthy Lifestyles”
  • Generic Milk Marketing Campaigns
  • Advertising by Marketers
  • Table 4-2: The U.S. Flavored Dairy/Dairy Alternative Beverage Market: Selected New Product Introductions, 2002—2003

Chapter 5: Consumer Trends

• Epidemic of Obesity
  • Adults Getting Heavier
  • Table 5-1: Age-Adjusted* Prevalence of Overweight and Obese U.S. Adults (age 20-74 years)
  • Sounding the Alarm on Childhood Obesity
  • Table 5-2: Prevalence of Overweight Among Children and Adolescents, Ages 6-19 Years (Selected Years 1963-65 through 1999-2000)
  • Risks and Costs of Obesity
  • Is Dairy a Part of the Solution?
  • Can Flavored Dairy-Based Drinks Fill the Bill?
  • Table 5-3: Recommended Daily Levels of Calcium for Children and Teens
  
  
• The Carbohydrate Conundrum
  • Did Low-Fat Diets Make Us Fat?
  • Labeling Regulations On the Way?
  • Low-Carb a Significant Trend
  • Dairy in Low-Carb Diets
  • Table 5-4
  • Milk and Chocolate Milk Comparison of Calories, Carbohydrates, Protein and Saturated Fat
  • Flavored Soymilk in Low-Carb Diets
  • Table 5-5: Carbohydrate Counts of Popular Flavored Soymilk Brands
  • Healthy Weight With Dairy
  
  
• Health, Wellness, and Aging Boomers
  • Boomers a Boon to Dairy Alternatives?
  • Calcium a Long-Term Investment in Bone Health
  • Table 5-6: Calcium Recommendations for Adults
  • Soy for Heart-Health, Lactose Intolerance, Risk Reduction
  • Organic Foods for Health and Values
  • Organic Dairy Sells in Supermarkets
  • Who is the Organic Consumer?
  • Table 5-7: Percentage of Consumers Who Use Organic Foods: Overall, Regularly, Occasionally, and Infrequently
  • Wellness Consumers Want Natural Ingredients
  
  
• Flavored Dairy and Dairy-Alternative Consumers
  • Teen Consumption Goes Up
  • Table 5-8: Teen Milk Consumption/Milk Share of Teen Beverage Market, 2000-2001
  • Kids Drinking More Milk, Too
  • Table 5-9: Per Capita Milk Consumption, Children Ages 6 - 12, 2000-2001
  • Adults Find Convenience Convincing
  • Ready-To-Drink Coffee Skews Younger
  • Drinkable Yogurt Targeted to Toddlers, Kids, Moms
  • Who Are the Soymilk Drinkers?
  • Potential Among Hispanic Consumers
  
  
• Consumer Demographic Data
  • The Simmons Survey System
  • Chocolate Milk Penetration Highest
  • Consumer Focus: Chocolate Milk
  • Table 5-11: Demographic Factors Favoring the Most Often Use of Chocolate Milk
  • Consumer Focus: Other Flavored Milk
  • Table 5-12: Demographic Factors Favoring the Most Often Use of Other Flavored Milk
  • Consumer Focus: Drinkable Yogurt
  • Consumer Focus: Soymilk
  • Table 5-13: Demographic Factors Favoring the Most Often Use of Drinkable Yogurt
  • Table 5-15: Demographic Factors Favoring the Most Often Use of Soymilk

Chapter 6: Distribution

• Flavored Milk Supermarket Sales
• Soymilk, Soy Drinks Mainstreaming
• Table 6-1: 2001 Channel Breakdown for Soymilk Sales*
• Table 6-2: 2001 Refrigerated Soymilk Sales vs. Shelf Stable, by Channel*
• Supermarkets Primary Sales Channel
• Drinkable Yogurts More Than 15% of Yogurt Category


• The Milk Machine: Opportunities in Vending
  • Midwest Tests Dairy Vending
  • National Milk Vending Tests by MilkPEP
  • Second Test Branches Out
  • Promising Vending Results Inspire Processors
  
  
• 
  Convenience Store Channel— Beyond the Gallon
  • Flavored Milk Sales Projected to Grow in C-Stores
  • FMSTI Study Says Single-Serve Drives Convenience Store Milk Sales
  
  
• Restaurants, Coffee Chains Boost Image with Milk
  • Single-Serve Milk Boosts Sales, Offers Fast-Food Options

Chapter 7: The Marketers

• M&A Still the Trend, Though 2002 Slow
• Table 6.1: Dairy Processor Mergers & Acquisitions 1998-2002 & First Half 2003
• Top Dog: Dean Foods
• National Dairy Holdings — Consolidation and Speculation
• Group Danone Ups Share of Brown Cow Buyer Stonyfield Farm
• New Competitors from Carbonated Soft Drink Industry
• CSD Per Capita Consumption Down
• Table 6.2: U.S. Carbonated Soft Drink Market Per Capita Consumption, 1997-2002
• Top CSD Cos. Enter Market
• Small Innovators Still Make Waves
• Table 6-3: The U.S. Flavored Dairy and Flavored Dairy Alternatives Market: Selected Marketers by Brand Line and Product


• Marketer Profiles
  • Marketer Profile: General Mills
  • Brands: Yoplait Nouriche yogurt smoothie, 8th Continent soymilk
  • Marketer Profile: Stonyfield Farm
  • Brands: Stonyfield Farm Yogurt Smoothies, YoBaby Drinkable Yogurt
  • Marketer Profile: Dannon
  • Brands: Dannon Danimals Drinkable yogurt, Light ‘n Fit yogurt smoothies, Frusion yogurt smoothies
  • Marketer Profile: Lifeway Foods
  • Brands: Lifeway Kefir, La Fruta cultured dairy beverage, Soy-Treat soy-based kefir
  • Marketer Profile: The Hain Celestial Group, Inc.
  • Brands: WestSoy soymilk, Soy Dream soymilk, Rice Dream rice milk
  • Marketer Profile: White Wave Inc.
  • Brands: Silk soymilk, Sun Soy soymilk
  • Marketer Profile: Eden Foods
  • Brands: Edensoy soymilk
  • Marketer Profile: Dean Foods
  • Brands: Dean Milk Chugs; Flavored Milks sold under Meadow Gold, Borden, other brands
  • Dean Branded Products Group: Hershey’s Milks and Milkshakes; Folger’s Jakada
  • Marketer Profile: Nestle USA
  • Brands: Nestle Nesquik
  • Marketer Profile: PepsiCo
  • Brands: Starbucks Frappuccino, Starbucks DoubleShot; new dairy-based product introductions likely
  • Marketer Profile: Starbucks
  • Marketer Profile: Bravo! Foods
  • Brands: Looney Tunes, Slammers, Slim Slammers, Moon Pie, Super Heroes
  • Marketer Profile: Snapple Beverage Group
  • Brands: Yoo-hoo
  • Marketer Profile: Horizon Organic
  • Brands: Horizon Organic
  • Marketer Profile: Organic Valley Family of Farms
  • Marketer Profile: Mac Farms Inc.
  • Marketer Profile: Oberweis Dairy
  • Marketer Profile: HP Hood
  • Marketer Profile: Marigold Foods
  • Brands: Kemp’s Yo-J, Kemp’s milk, Oak Grove milk

Chapter 8: Trends and Opportunities

• Health Concerns Support Milk, Soy Intake
• Schools On the Lookout for Better Beverages
• Low-carb Formulations Will Increase in 2004
• Dairy Alternatives Will Continue to Find New Users
• Yogurt Drinks Have Growing Appeal
• Coffee Drinks Benefit From Shelf-Stable Multi-packs
• Organic Keeps Growing
• 3-A-Day, Healthy Weight With Dairy Campaigns Support Growth
• Proliferation of Choices

Appendix: Addresses of Selected Marketers