Dairy Foods- Fruits, nuts and inclusions slated to drive market growth to $18.7B by 2027

The food inclusions market — split into chocolate chips and chunks, candy pieces, fruits and nuts, herbs, spices, and even savory ingredients like cheese or bacon bits — is thriving based on demand for value-added food products and significantly wider application in dairy products, ice cream, frozen desserts, confectionary, baked products, and snacks and bars.

In fact, food and beverage manufacturers are investing in new product development as the food inclusions market, valued at $13.4 billion in the U.S. in 2022, is projected to reach $18.7 billion by 2027, with a compound annual growth rate (CAGR) of 6.9%, states New York-based Market Research Future.

In addition, growing preferences for healthy and tasty food products may serve as an opportunity for market growth, but at the same time the market research firm cautions that the high cost associated with raw materials may restrain market growth.

When it comes to market share, fruits and nuts, at 27.5%, command significant market share and are likely to grow at a CAGR of 6.8%, the report states. Kalamazoo, Mich.-based FlavorSum’s Phil a’Becket notes that chocolate inclusions retain the largest share; however, fruits and nuts are registering a higher CAGR.

“Caramel and other sugar-based inclusions round out the balance of the market,” the senior consumer insights manager states. “Beyond adding complexity to flavor, visual appeal and texture, the nutritional value of food inclusions is contributing to increased interest. The functional benefits of fruits, seeds and nuts (e.g., energy, protein, vitamins) boosts demand, especially when paired with the convenience of ready-to-eat dairy products like yogurt.”

Amanda Cardinal, marketing coordinator at Dallas-based Pecan Deluxe Candy Co., concurs that yogurt is “leading the charge,” with such flavor innovations as strawberry and lime paired with crunchy additions such as praline almonds or cranberry granola to create deconstructed dessert-like experiences.

Yet, dairy inclusions are more than a one-trick pony, as in addition to yogurt, they’re being used in puddings, ice cream, cream cheese, cheese and frozen novelties. On the plant side, plant-based sour creams and cream cheeses also are innovating in this space.

“These mix-ins also breathe new life into products that might have appealed more to older generations, making them more attractive to younger consumers looking for convenient and fun snacking options,” Cardinal explains. “In non-dairy categories, plant-based options like oat milk and almond milk are well-established, but innovations in these areas are also continuing to grow, especially for consumers who are seeking alternative dairy-free options with similar texture and flavor profiles.”

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