Single-serve fluid milks, for example, extended into lattes, shakes and new flavors. Organic products marched across all categories and found success.

Consumers have shown a willingness to experiment with bizarre ice cream combinations, non-traditional cheese flavors and tropical yogurt flavors. Dairy products also gained notoriety as the one-and-only real source of calcium, improving their image as a functional food.

Adding soy to cows milk yogurt provides consumers with added functional benefits.

Freezer Frontiers

Burlington, Vt.-based Ben & Jerry's added Island Paradise--a pineapple ice cream with a passionfruit swirl and a hint of coconut--to its flavor list. Also new, KaBerry KaBoom! is strawberry and blueberry ice cream with white fudge-covered crackling candies (i.e., Pop Rocks) and blueberry swirl.

To tap into the brand loyalty of Nascar fans, Wells' Dairy Inc., Lemars, Iowa, teamed up with the racing group to license its name for use on three novelties. In addition, Wells' launched a novelty line just for Hispanic markets. One of the products in the line, Lucas Limon, tastes like a margarita. Another product, Lucas Pelucas contains tamarind fruit with a kick of chili powder.

Fat-free and lowfat ice creams may be a thing of the past, but no-sugar-added ice creams continue to have a strong presence and it's not because of a diabetic following. The Sugar Busters ice cream line from Marigolds Foods Inc., Minneapolis, appeals to folks following popular low-carbohydrate diet plans.

Cheese Please

This data has dairies like Cabot Creamery, Cabot, Vt., adding green olive or sage and onion ingredients to its flagship Vermont Cheddar cheese.

Packaging is also enabling cheesemakers to provide their products with a point of distinction. Plymouth, Wis.-based Sargento Foods Inc. is the first to put its shreds in a reclosable, slider zipper package.

The use of cheese as an ingredient in prepared and snack foods continues to grow. New Berlin, Wis.-based Mexican Accents offers Manny's Quesadillas. Each package contains two slices of Cheddar cheese wrapped in a flour tortilla, which can be microwaved. A packet of salsa is enclosed.

Value-added and Functional

Parmalat introduced a line of value-added refrigerated milks. Varieties include Skim Plus, which uses fat-free milk proteins to turn ordinary skim milk into creamy, nonfat milk with 37% more protein and 34% more calcium than whole milk. Milk-E is fortified with vitamin E and biotin, and the company says it promotes a healthy complexion and delays the skin's aging process. Lactose Free Plus is fortified with the prebiotic inulin and two beneficial bacteria--acidophilus and bifidus.

After a few years without much activity, the yogurt category is coming around. The good news is that many of the new products are truly innovative and directly fit into the functional foods movement.