The rise of functional foods and beverages over the past decade has been nothing short of meteoric, driven strongly by increasing consumer knowledge and demands for better value-for-money in their purchases.
A lot of hype has been had over new and upcoming functional ingredients that are set to move the category to the next stage, from nootropics to fibre, but one particular area which is set to see a real boom in the near future is that of functional dairy where a lot of new tech-driven innovation is taking place.
Case in point is New Zealand-based brand Lullaa, which recently entered the market with its product Smartmilk, claiming this to be an entirely new, next-generation product reinventing the category.
“We use our proprietary, patent-pending BioFusion process to integrate functional ingredients directly into milk without fermentation, gums, stabilisers, or preservatives – This allows the product to remain clean label while delivering meaningful everyday nutrition in a familiar format,” Lullaa Co-Founder Vibhah Shiriwastow told us.
“This shifts the product from being a ‘milk with added ingredients’ into a new functional milk category, where the function is built into the system itself.”
The BioFusion process was developed to solve key challenges in the industry such as the ingredient separation, probiotic death and collagen denaturation, designed as a low-temperature, multi-phase infusion process with a proprietary pH balance.
This allows the functional milk to retain and deliver multiple benefits simultaneously such as collagen for skin elasticity and probiotics for gut and brain health.
Dairy giant Yili also sees technology as an important driver for the category, playing a very key role in enhancing dairy products’ nutritional value to ensure their worth as functional products.
“Some of the key areas that technology plays in the growth of functional dairy is for formula optimisation, developing value-added ingredients, upgrading production equipment and creating low-carbon packaging,” Yili Assistant President Dr Ignatius Szeto told us.
“In China, [there is an added element] to consider which is the growth of the food as medicine concept here – the government’s strong focus on this area has driven increasing work in the area of integrating traditional Chinese medicine with western medicine, and technology [plays an important role] in making this possible.”
The most promising areas for functional dairy growth
Yili believes that one of the areas with the most potential for growth here is weight management, where a combination of western (probiotics) and TCM concepts could make a bigger impact than either individually.
“Our research has shown that some probiotics such as l.paracasei K56 have a positive impact on the reduction of body fat and waist circumference in obese individuals; whereas TCM herb coix seeds (also known as Job’s tears) are traditionally known for their diuretic properties,” he said.
“We found that combination of these two items can help to control body weight, reduce fat content, decrease blood glucose and cholesterol levels, as well as reduce gut inflammation.”
Another area with major growth potential is gut health, which academic studies have shown to be the most vastly-accepted by consumers new to the functional dairy category.
“Many researchers have examined the acceptance by consumers of new functional ingredients of dairy products via using a food neophobia scale [and have found that] gut health remains among the most promising and well-accepted target for these functional foods,” researchers said in a Biomed Research International cross-country study covering China, Iraq and Malaysia.
“[This especially concerns] digestive functions related to balanced microflora that involve controlling the bioavailability of nutrients, modulating the immune activity of the digestive system, or mediating endocrine activity of the digestive system, [and] this is where probiotics tend to come into play.”
So what’s next in the evolution of functional dairy?

Tune in to the Positive Nutrition broadcast on The Frontiers of Functional Dairy on Thursday, March 5 to hear more from Yili and Lullaa, gain insights from other dairy leaders such as Bel Group, explore the role of bioactive proteins such as lactoferrin, and discover the trends shaping the future of the category.
Register for free to join us on the day or watch the recording on-demand whenever it suits you.
