Consumer Insight and Approaches in New Dairy Products Development
Minna Mikkola1 and Fedele Colantuono2
- 1 Ruralia Institute, University of Helsinki, Mikkeli, Finland
- 2 Department of Economics, University of Foggia, Italy
As Fearne and Bates (2003) poignantly state, “Food consumers are complex creatures and their wants and needs are many and varied and are continuously changing.” Understood conversely, this statement describes the complexity of the social dynamics of dairy food chains and the markets in general, as well as pertaining to the competitive development of new dairy products and deployment of various technologies on the dairy sector in particular. Dairy companies are often strong product developers driven by economic viability (Fearne and Bates, 2003), whereby new technologies may offer increased market shares as consumers are seeking interesting products with specific benefits (Bruhn, 2007). However, more traditional technologies, related to products labeled by geographical origin (adding recognition of the country of origin and organic products), may attract customers offering these products strong presence in the market (Mora and Menozzi, 2009). The authors emphasize, however, that dairy companies have to negotiate their strategies with powerful retail chains, and are largely dependent on them for their sales channels when looking for encounters with their consumers (Atkins and Bowler, 2001).
While the consumer's foremost interest often regards the quality and characteristics of the product per se, it may also pertain to upstream the dairy supply chain entailing environmental, animal welfare and socioeconomic aspects, building up the character of the conditions of production (Buttel, 2000). From an individual consumer's perspective, it is credible that “good flavor, convenience, and health enhancing properties” are most important product characteristics in the US market (Bruhn, 2007). Products with a new flavor, unique combination, or recipe are the most successful ones in supermarkets. Furthermore, products with enhanced convenience are among top supermarket sellers, and functional properties such as fibers, beneficial fatty acids, lycopene, vitamin C, and probiotic cultures have gained media coverage (Bruhn, 2007). Other areas of new product development in the dairy industry have revolved around premiumization and indulgence, convenience and snacking, and lifestyle and ethics (Brockman and Beeren, 2011).
Evidently, consumers also have strong collateral interests to purchase products for their children or other persons of regard, thus negotiating their purchases respectively (Basset
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et al., 2008; Carrigan et al., 2006). Markets must also cater to varying consumer interests. Consumers may wish to signal their positional consumption (Dwyer, 2009), and advocate for consumption of organic milk within their families to promote health, environmental friendliness, and sustainability interests (Gronhoj, 2006). Some of this is trend-following behavior; other consumers are following principles or religious convictions, be these in alignment with market economy, sustainability, or bioregional belonging (Mikkola and Risku-Norja, 2014). Consumer concerns are also particularly justified on the dairy sector due to the connotations to an animal sentient (e.g., the cow) (Buttel, 2000).
Thus, today, consumers tend to evaluate a balance of interests realized for actors within the food chain; this vertical view actually drags the whole supply chain from dairy farmers to dairy companies to retail chains into competition in the market. Furthermore, consumer evaluation also plays on all dimensions of personal and family members' satisfaction, context, health and environmental views and aspirations, issues in economic allocation, and a range of emotions. Obviously, this leads in principle to complex and massive amount of information and considerations to be dealt with by the consumer (Fernqvist and Ekelund, 2014). However, consumers cannot typically process all of this information to yield highly informed decisions, so some information will be partly ignored or partly deployed, in a multitude of contextual and positional ways (Mikkola and Morley, 2013).
Intriguingly, both low and high levels of dairy technologies are essential resources by companies trying to gain competitive advantage in the market through new products. Whether a particular technology becomes an innovation, accepted by consumers in the market at large, is therefore crucial and needs to be addressed early in technology development (Frewer et al., 2011; Siegrist, 2008). Obviously, not all innovations become successes; instead of accepting a technology, consumers may resist it through not trying, postponement, rejection, or even opposition (Szmigin and Foxall, 1998, in Kleijnen et al., 2009). Generic understanding holds that males are more willing to consume products manufactured by new technologies, and females, as cautious and concerned, are less so (Cardello, 2003, in Olsen et al., 2010). Several authors mention a number of factors influencing adoption of innovations such as personal satisfaction, personal and social norms, moral objections, perceived risk and benefit, situation related practices, prices, product communication, and trust in regulations and industries (Almli et al., 2011; Bruhn, 2007; Frewer et al., 2011; Olsen et al., 2010; Siegrist, 2008). Ronteltap et al. (2007) build up a conceptual framework for research on acceptance of technology-based food innovation, including factors from social system and consumer characteristics to evaluation of perceived cost-benefit as well as risk and uncertainty, subjective norms, and perceived behavioral control, leading to intention of consumption and finally decision to accept or reject the product.
Dairy businesses clearly would like to better understand consumer behavior in order to create new products and invest in the “right kind” of technologies. So far, prediction about market developments is difficult, albeit today's particular trajectories for health, convenience, and environment have become visible. For dairy companies, it is also important to impact on consumption of new products through customer communication and active participation in the regulative sphere. Obviously, consuming interests and concerns for dairy products vary, and as dairy technologies are highly idiosyncratic, no generic pro-technology orientation can apply; consumer acceptance of these products and their technologies must be analyzed case by case, as they present different issues (Frewer et al., 2011; Millar et al., 2002).
The aim of this chapter is to deal with consumer acceptance of, or resistance to, and even opposition to particular dairy products strongly characterized by their technologies and to illustrate social dynamics in the dairy market in industrialized countries. These products represent today's dairy industries, characterized on the one hand by aims toward naturalness and increasingly embodying hybrid nature, on the other. This hybrid nature includes more or less sophisticated technological competence deployed in the management of dairy supply chain or manufacturing the product. Then, a new dairy product development process is described as a way to respond to consumer insights and approaches in a compatible way. Finally, the chapter concludes by outlining relations between consumers and dairy industries as ways forward to develop new products and their technologies, entailing societal acceptance and product promotion by communication.