Why Kerry exited hybrid dairy and pivoted Smug to snacking

Smug Dairy was meant to ‘have it all’, but Kerry’s brand of oat and dairy-blended products is reverting to 100% dairy after it struggled to find an audience.

When it was launched in March 2024 in the UK, the brand meant to make consumers feel ‘smug’ about choosing a new type of product. But a year and a half later, Kerry is pulling the plug on Smug as a hybrid dairy brand – and is re-imagining it as a with an on-trend snacking offering.

Originally formulated to appeal to flexitarians, Smug Dairy comprised milk, cheese and butter alternatives made from a blend of oats and traditional dairy. The idea was to deliver on taste and functionality – something plant-based dairy, and especially alt cheese, has struggled with – while inviting consumers who are curious but sceptical about dairy alternatives to give Smug a go.

However, the range is being discontinued, as reported by The Grocer. Victoria Southern, strategy, marketing and innovation director at Kerry Dairy Ireland, said that the company was focused on creating products that were ‘relevant’.

“Our priority had always been to adapt in line with evolving consumer needs,” she told us. “As tastes and behaviours shift, we will evolve with them to make sure we’re creating products that are relevant.”

“While our dairy and oat-blended range delivered on taste and function, categories like milk and butter are difficult to disrupt.”

Victoria Southern, KerrySo what’s next for Smug? A (fully) dairy snacking offering, from cheese bites to quark-filled desserts, to launch in 2026. These new products were already part of the NPD pipeline for Smug, Southern explained as she said snacking is an area of ‘dynamic growth’.

“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,” Southern said.

“These are best applied in categories where consumers are more curious and open to trial. The launch into dairy snacking to feel Smug about was always part of our progressive roadmap and sees us step into one of the most dynamic growth areas in food where consumers are naturally curious and open to discovery.”

The new snacking range will include Cheese & Crunch, a cream cheese with accompaniments in two variants, Sea Salt & Rosemary Crackers and Barbecue Corn Bites, and Cheese Strings in two variants.

“Each of our new products is designed to meet a specific consumer need in the fast-growing snacking space,” Southern added.

“Cheese & Crunch delivers portion-controlled pairings that fit perfectly into food-to-go occasions and meal deals.

“Quarkies bring a lighter, high-protein option in popular flavours, offering a modern twist on traditional dairy that plays into the rising trend of functional indulgence.

“Finally, Cheese Strings brings playful fun into adult snacking occasions, tapping into the demand for protein-led snacks that balance enjoyment with permissibility.”

Smug’s new dairy snacks will launch in January 2026 in the UK. (Kerry Group)The name ‘Quarkies’ stood out to us: does Smug aim to reinvent quark into the new cottage cheese – banking on its high-protein, low-calorie credentials to transform the dairy curd into an on-trend ingredient?

“Quark is naturally high in protein, light in texture and incredibly versatile,” Southern told us. “This makes it perfectly placed for today’s consumer who wants nutrition without compromise on taste.”

“With Quarkies, we’re giving quark a fresh, snackable identity that feels indulgent yet functional, whether it’s for a mid-afternoon pick-me-up or a lighter alternative to traditional dairy snacks.”

Victoria Southern, Kerry“We believe this modern take on a classic dairy product fits seamlessly with today’s snacking occasions, showing how Smug makes dairy feel good in ways that are relevant, exciting and designed around what consumers are seeking most.”

From plant-based to functional: Lessons from Arla Foods UKAs dairy alternatives have fallen out of favor, manufacturers have taken notice and adapted their portfolios.

Earlier in 2025, Arla Foods UK discontinued its oat-based drink Jord from the British market, citing desire to focus on value-added dairy products to drive farmer profits.

Launched in 2020, Jord was the Danish dairy major’s first plant-based milk alternative in the UK; it landed on shelves at a time when the plant-based milk category was taking off globally, but the segment has failed to replicate this performance in recent years.

Arla’s Jord is made with Nordic Oats and enriched with Vitamin D, Vitamin B9, and fiber and continues to be sold in the EU. But over in the UK, the dairy co-op is reacting to a different trend: gut health.

Cultura, a range of gut health drinks and yogurts that Arla already offers across Denmark, the Netherlands and Sweden, was launched in September in the UK with the aim to challenge the biotics and gut health space with an affordable offering.

Is hybrid dairy dead? Not quite… yetWith Kerry’s category-disrupting range being discontinued, where does that leave the global hybrid dairy category?

In Europe, PlanetDairy made waves in recent months by launching private label hybrid milk made from dairy and plants for the biggest Dutch retailer Albert Heijn. The range is being sold alongside traditional dairy milk in fridges, at price parity, and its branding mostly conveys the alt dairy product’s lower environmental footprint, in a bid to keep things simple for consumers.

PlanetDairy CEO Jakob Skovgaard told us the company are all ‘dairy lovers’ who don’t want to replace traditional dairy with plant-based alternatives; rather, offer an alternative that’s close enough to the real thing but lower in carbon emissions.

Retailer Albert Heijn has also launched meat alternatives as part of a wider alternative protein push.

As for how the hybrid dairy range is performing, the early signs are encouraging, Skovgaard told us – but whether the category really takes off with shoppers remains to be seen.