Dutch supermarket Albert Heijn has launched a blended yoghurt combining dairy with fava beans, just as Kerry has discontinued its hybrid Smug Dairy range in the UK.
While blended meat is entering supermarkets in Europe and the US with aplomb, the same can’t be said of hybrid dairy.
When Kerry launched its Smug Dairy range in the UK last year, combining dairy with oats to produce milk, cheese and butter products, it promised to “shake up the dairy category” and give consumers “healthier and more sustainable” options without compromising on taste. It even spent £5M on a marketing campaign for the range.
Last month, though, it said it was scrapping the entire lineup, turning its focus to a 100% dairy-based snacking range. It was a major example of a disruptive product not quite scaling the heights it needed to.
Just across the North Sea, things are going the opposite way. After introducing two blended milk products in June, Dutch retailer Albert Heijn has expanded into hybrid yoghurts.
The two contrasting approaches beg the question: why did Kerry’s effort fail, and what keeps Albert Heijn confident in the category’s future?
Why Kerry’s hybrid Smug Dairy range didn’t work
Explaining the decision to withdraw the hybrid dairy products, Kerry Dairy Ireland’s strategy and marketing head, Victoria Southern, said that though the range had delivered on taste and function, “categories like milk and butter are difficult to disrupt”.
“Our focus is now on leaning into Smug’s strengths to deliver new products that are great in taste, stand out with playful branding and highlight clear nutritional benefits. These are best applied in categories where consumers are more curious and open to trial,” she highlighted.
So why didn’t Brits find these products appealing? There were two primary issues: the milk-to-oat ratio and the price tag.
Kerry’s blended milk only contained 25% of plant-based ingredients, rising to 25% for the block butter and 30% for its Cheddar. The only offering with an equivalent amount of plants was the spreadable butter, which was its most climate-friendly product, offering 54% lower emissions than 100% dairy butter.
The other products offered very little in terms of sustainability – for example, the Smug Dairy milk only achieved an 18% emissions reduction. It just wasn’t a big enough difference to move the needle with most dairy consumers.
Smug Dairy didn’t cater to those who would be swayed by cheaper products either. Its hybrid butter was priced at £9.38 per kg, higher than the £7 cost of its Kerrymaid dairy spread, and more than twice as expensive as the dairy-free spreadable butter sold by Kerry’s Pure brand (for £4.30 per kg).
Its hybrid Cheddar block was also only 36p cheaper per kg than Cathedral City’s dairy-free version, and the oat-dairy milk set you back only 5p less than Alpro’s oat milk. Blended proteins are designed as a bridge between flexitarians and plant-based eaters, but it’s hard to justify a shift towards hybrid dairy when the gap with vegan versions is so narrow.
There’s one more problem worth looking at: did Kerry launch the wrong products? A recent study found that consumers are least receptive to hybrid beverages and milks, and most interested in yoghurt and ice cream formats.
Albert Heijn looks to lure shoppers with cheaper hybrid yoghurt
This is where Albert Heijn comes in. Its latest launch is a hybrid yoghurt with 60% dairy and 40% plant-based ingredients (primarily sunflower oil and fava bean protein), a recipe much more suited to success.
The launch adds to its existing blended dairy range, which includes whole and semi-skimmed milk with 70% and 60% dairy, respectively. They’re produced by Dutch firm Farm Dairy and Denmark’s PlanetDairy, and can lower emissions by 20-30%.
While the inclusion rate for the hybrid whole milk is still low for plant-based ingredients, Albert Heijn ensured that these products are priced the same as their conventional counterparts, minimising the risk of alienating shoppers.
The hybrid yoghurt, sold in one-litre cartons, goes one better. It costs €1.49, 10 cents cheaper than Albert Heijn’s own-brand dairy yoghurt with 1.5% fat.
Further, it delivers on the nutritional front, containing an equal amount of protein, but 90% fewer saturated fat (just 0.1g per 100ml), and more vitamin B12, vitamin D and calcium than yoghurt made entirely from cow’s milk.
These attributes put Albert Heijn’s hybrid dairy range on course for success. They’re part of its larger ‘balanced protein’ range, which also features 13 blended meat products, the most extensive such lineup anywhere in the world. The retailer has rolled out a blended beef burger in Belgium too.
In July, it became the first supermarket to publicly report its methane footprint, which makes up 14% of its scope 3 emissions. Albert Heijn is now aiming to reduce this by 45% by 2030 (compared to 2018 levels) – that effort will only be aided by its big bet on blended proteins.
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