Rich Sales Boost Coffee Creamers
February 03 2020 - 9:22AM
Dow Jones News
By Annie Gasparro
Food makers are taking a fresh look at coffee creamers, eager to
benefit from rising demand for products that hadn't changed much
for decades.
Nestlé SA and Danone SA long dominated sales of oil-based
creamers in classic flavors such as French vanilla. Now younger
coffee drinkers with an affinity for indulgent, customized drinks
are stoking demand for new flavors and variety.
Smaller companies are satisfying that demand with creamers made
from dairy alternatives including oats and soy. Meanwhile, the
biggest brands, Nestlé's Coffee Mate and Danone's International
Delight, are generating higher sales with new flavors, such as
Funfetti cake and Peeps candy.
Sales of liquid coffee creamers rose about 9% last year,
according to market-research firm Nielsen, compared with 2% growth
across the food industry overall. Creamer sales have risen at a
faster pace than total food sales for the past four years, Nielsen
said.
Food makers say they are finding fans among younger consumers
reared on sweeter coffee drinks such as Starbucks Corp.'s
Frappuccinos.
"The younger generation is creaming a lot more than their
parents did," said Daniel Jhung, president of Nestlé's beverage
division. "They don't like black coffee. They like coffee
milkshakes."
Suzy Perez, who works for a construction company near Orlando,
Fla., said she recently bought a creamer brand called Kitu Super
Creamer that contains no sugar but includes added protein and MCT
oil, which is said to boost energy.
"I'm trying to be more health conscious and stay away from that
extra sugar," she said.
Competition for customers like Ms. Perez is tougher than
ever.
"Other brands across the food sector are noticing the growth,"
said Olivia Sanchez, vice president of marketing for Danone's
creamer division. The company added Hershey's, Peeps and Reese's
flavors to its International Delight brand to appeal to younger
customers craving sweeter drinks.
"They are in it for the flavor, not necessarily for the coffee,"
Ms. Sanchez said.
Most of Danone's and Nestlé's creamers are made primarily of
vegetable oil and sugar. Sales of plant-based creamers rose 30%
last year to 8% of the creamer market, according to Nielsen. Sales
of fresh-milk creamers and plant-based alternatives are growing
even faster.
Anita Jackson, a mother of two boys in Minneapolis, said she
recently switched to plant-based creamers because she believes they
are healthier. "I still look forward to my light-and-sweet cup of
coffee," she said.
Califia Farms, a maker of plant-based milk substitutes, is
adding an oat-based creamer and other products this year. Chief
Executive Greg Steltenpohl said grocers are allocating more space
to these new creamers as sales in the category grow. "Just plain
half-and-half won't cut it anymore," he said.
Some dairy companies are adding higher-end creamers, too.
Fairlife, a filtered milk brand that Coca-Cola Co. took over this
month, said its creamer has 40% less sugar than leading brands.
"We are capitalizing on the trends of more natural and less
ingredients, " Fairlife Chief Executive Tim Doelman said.
Chobani LLC, maker of Greek yogurt, has added milk-based
creamers to its product line. The company has been looking for new
areas of growth as the yogurt aisle has grown more crowded.
"We want to disrupt creamers like we did yogurt 12 years ago,"
Chobani's President Peter McGuinness said.
Nestlé and Danone are adding creamers that some consumers
consider more healthful because of the narrower list of natural
ingredients they contain. Nestlé created a brand called Natural
Bliss that includes milk-based and plant-based creamers. Danone
recently introduced an oat-milk creamer under its dairy-free Silk
line and a craft-coffee creamer that is high in protein and low in
sugar.
"Consumers want everything," Danone's Ms. Sanchez said. "They
want flavor. But other times they want to do better from a health
standpoint."
Write to Annie Gasparro at annie.gasparro@wsj.com
(END) Dow Jones Newswires
February 03, 2020 09:07 ET (14:07 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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