Table of Contents
Scope and Themes
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- What you need to know
- Definition
- Data sources
- Consumer survey data
- Abbreviations and terms
- Abbreviations
Executive Summary
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- Market experiences growth through price increase amid reduction in consumer demand
- Milk faces increased competition from yogurt, yogurt drinks, and soymilk
- Private labels dominate the highly commoditized market; top six processors only make up 26% of total sales
- Organic milk drives growth, but remains a small portion of overall sales
- Whole milk declines, low-fat/skim milk grows through price increases, and flavored milk remains stagnant
- Growth drivers related to demographics have mixed blessings for the market
- Personal incidence of using milk lags that of drinking carbonated drinks and bottled water
- Green packaging, lack of growth hormone are important in purchasing milk
- Milk users are most likely to use milk in cereals
- Parents’ attitude toward serving milk to children
- Reasons for not drinking milk
Insights and Opportunities
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- Position milk as a cheap source of high-quality protein
- Change its image from banal to exciting and purposeful
- Promote milk as a weight-loss aid
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- Figure 1: Attitude towards health, 2004 and 2008
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- Figure 2: Reasons for watching/controlling diet, 2004 and 2008
- Innovate to launch “satiety” claims for both casual and serious dieters
- Milk with probiotics is likely to bring growth
- Flavor innovation focused on exciting flavors, increase in shelf-stable single-serve milk are likely to drive growth
Inspire Trends
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- Trend 1: Brand Experience
- What's it about?
- The milk industry and brand experience
- Trend 2: Healthy indulgence
- Going beyond the tastebuds; create indulgence for mind
Market Size and Forecast
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- Key points
- Consumers retract demand amid growing competition from other dairy products
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- Figure 3: FDMx volume sales of refrigerated white and flavored milk/eggnog/buttermilk in FDMx, 2003-08
- Private-label milk sales define the total market
- Sales and forecast of milk and dairy beverages
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- Figure 4: Total FDMx and c-store sales and forecast of milk and dairy beverages, at current prices, 2003-13
- Figure 5: Total FDMx and c-store and forecast of milk and dairy beverages, at inflation-adjusted prices, 2003-13
- Walmart sales
Competitive Context
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- Key points
- Raw milk prices nosedive due to surplus; may create price deflation at retail in 2009
- Yogurt and yogurt drinks give stiff competition to milk
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- Figure 6: Yogurt and yogurt drinks dollar sales in FDMx, 2003-08
- Soymilk soars at the expense of milk
- Private labels grow their dollar share in the milk market, but create price deflation
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- Figure 7: Private label and branded milk dollar and volume market share, 2003-08
- Private label push toward hormone-free milk
- Organic milk drives growth, but sales slow down amid recession
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- Figure 8: Organic milk dollar and volume sales in FDMx, 2003-08
Segment Performance
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- Key points
- Price increases contribute to the sales growth in refrigerated white milk
- Little news for flavored milk
- Shelf-stable single-serve milk and powdered milk drive growth in “other” milk
- Segment sales and forecast of milk
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- Figure 9: FDMx sales and forecast of milk, at current prices, by segment, 2003-13
- Figure 10: FDMx sales of milk, segmented by type, 2006 and 2008
Segment Performance—Refrigerated Skim and Low-fat Milk
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- Key points
- Small growth from increase in prices; consumers continue to reduce demand
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- Figure 11: FDMx volume sales of branded and private-label skim and low-fat milk, at current prices, 2003-08
- Organic milk and hormone-free non-organic milk continue to show growth
- Innovations will find growth in skim and low-fat milk
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- Figure 12: FDMx sales and forecast of refrigerated skim/low-fat milk, at current prices, 2003-13
Segment Performance—Refrigerated Whole Milk
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- Key points
- Obesity trends disfavor whole milk; demand will continue to slide
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- Figure 13: FDMx volume sales of branded and private-label refrigerated whole milk, at current prices, 2003-08
- Organic whole milk garners growth, but may lose share to skim/low-fat organic milk
- Hispanics and blacks are primary whole milk consumers; but this base may dwindle
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- Figure 14: Hispanic household milk consumption, by type, by language spoken at home, July 2007-September 2008
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- Figure 15: FDMx sales and forecast of refrigerated whole milk, at current prices, 2003-13
Segment Performance—Refrigerated Flavored Milk/Eggnog/Buttermilk
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- Key points
- Narrow base of target consumers and limitations in flavors challenge segment growth
- Blacks and Hispanics are an ideal target to drive growth
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- Figure 16: Hispanic household flavored milk consumption, by language spoken at home, July 2007-September 2008
- Figure 17: FDMx sales and forecast of refrigerated flavored milk/eggnog/buttermilk*, at current prices, 2003-13
Segment Performance—Other
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- Key points
- Shelf-stable single-serve milk drives growth
- Powdered and evaporated/condensed milk benefits from growth in Hispanic-targeted products
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- Figure 18: FDMx U.S. sales and forecast of other milk, at current prices, 2003-13
Retail Channels
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- Key points
- Supermarkets experience impressive growth on the strength of private labels
- Convenience stores’ milk sales slow down; face growing competition from other beverages
- Drug and mass thrive on the strength of innovations and private labels
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- Figure 19: FDMx and c-store sales of milk, by retail channel, 2006 and 2008
Retail Channels—Supermarkets
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- Key points
- Supermarkets align private label innovation with consumer demand
- Supermarkets have the opportunity to grow single-serve SS milk
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- Figure 20: U.S. sales of milk at supermarkets, at current prices, 2003-08
Retail Channels—Convenience Stores
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- Key point
- Slowing pace of innovation in convenience stores; flavor innovation my garner growth at this channel
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- Figure 21: U.S. sales of milk at convenience stores, at current prices, 2003-08
Retail Channels—Natural Stores
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- Sales of milk and dairy beverages strong in the natural channel
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- Figure 22: Natural product supermarket retail sales of milk and dairy beverages, at current prices, 2007-09*
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- Figure 23: Natural product supermarket retail sales of milk and dairy beverages, at inflation-adjusted prices, 2007-09*
- Natural channel sales by segment
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- Figure 24: Natural product supermarket retail sales of milk and dairy beverages, by segment, 2007 and 2009
- Brand performance: Milk and dairy beverages
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- Figure 25: Manufacturer brand natural supermarket sales of milk and dairy beverages, 2007 and 2009
- Natural channel sales of milk and dairy beverages by organic and conventional
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- Figure 26: Natural product supermarket retail sales of milk and dairy beverages, by organic, 2007 and 2009
- Natural channel sales of milk and dairy beverages segment by organic
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- Figure 27: Natural product supermarket retail sales of milk and dairy beverage segment, by organic, 2007 and 2009
- Natural channel sales of non-dairy beverages segment by storage type
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- Figure 28: Natural product supermarket retail sales of non-dairy beverages, by storage, 2007 and 2009
- Natural channel sales of milk, half & half and cream by glass bottle
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- Figure 29: Natural product supermarket retail sales* of milk, half & half and cream, by glass bottle, 2007 and 2009
Market Drivers
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- Consumers lean toward eating healthily, but milk does not seem to have benefited from the trend
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- Figure 30: Attitudes regarding healthy eating, 2003 and 2008
- Figure 31: Per capita consumption of milk in the U.S., by type, 2002-07
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- Figure 32: Population, by age, 2004-14
- Households with children and large households impact milk consumption
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- Figure 33: Households, by presence of children, 1998-2008
- Figure 34: Annual consumption of milk in gallons in households, by number of people in household, 2008
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- Figure 35: Households, by number of members, 1998-2008
- Hispanics and blacks are crucial demographics for market growth
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- Figure 36: Households, by presence of children, and race/Hispanic origin of householder, 2008
- Figure 37: Population, by race and Hispanic origin, 2003-13
Companies and Brands
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- Key points
- Top six dairy processors only account for 26% of the total market share
- Private labels rule FDMx sales
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- Figure 38: FDMx sales of leading milk companies, 2007 and 2008
Brand Share—Refrigerated Skim/Low-fat Milk
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- Key points
- Private labels continue upward trend; takeaway sales from branded low-fat/skim milk
- Horizon remains the top organic brand and a growth driver in Dean’s portfolio
- HP Hood garners marginal growth from Lactaid and Hood Simply Smart
- Manufacturer and brand sales of refrigerated skim/low-fat milk
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- Figure 39: FDMx brand sales of refrigerated skim/low-fat milk in the U.S., 2007 and 2008
Brand Share—Refrigerated Whole Milk
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- Key points
- Private labels account for nearly 65% of the total market share
- Dean’s Horizon Organic, Dean Country Fresh, and Swiss dairy brands experience growth
- Manufacturer and brand sales of refrigerated whole milk
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- Figure 40: FDMx brand sales of refrigerated whole milk in the U.S., 2007 and 2008
Brand Share—Flavored Milk/Eggnog/Buttermilk
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- Key points
- Dean’s Horizon Organic posts growth, but sales remain small
- Nestlé Nesquik, the biggest-selling flavored milk brand loses appeal
- Private labels account for the biggest market share, but exhibit decline
- Manufacturer and brand sales of refrigerated flavored milk/eggnog/buttermilk
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- Figure 41: FDMx brand sales of refrigerated flavored milk/eggnog/buttermilk in the U.S., 2007 and 2008
Brand Share—Other
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- Key point
- Shelf-stable Horizon Organic experiences favorable consumer response
- Nestlé’s Hispanic-targeted products find small growth
- Manufacturer and brand sales of other milk
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- Figure 42: FDMx brand sales of other milk in the U.S., 2007 and 2008
Brand Qualities
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- Brands make an effort to differentiate through functional offerings amid competition from private labels
- Kemps innovates to target wider base of consumers…
- ..but probiotics are still missing
Innovation and Innovators
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- Introduction
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- Figure 43: Number of new product launches in milk and dairy beverage, 2003-08
- Top 10 U.S. claims during 2003-08
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- Figure 44: Trends in new product introductions in white milk and flavored milk, 2003-08
- Top trends in new products
- Trend toward natural, organic, and additive-free offerings
- Growing trend toward omega-3-fortified milk
- Flavor trends
- Narrowing range of flavors: innovations center around chocolate flavor
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- Figure 45: Trends in new flavor introductions in flavored milk, 2003-08
- Trends in children-targeted milk and dairy-based products
- Packaging trends
- Move toward environmentally friendly packaging
Advertising and Promotion
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- Introduction
- MilkPEP launches various initiatives to promote milk
- Milk producers communicate hormone-free proposition in non-organic milk
- Dean, the largest milk processor, listens to consumers
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- Figure 46: Dean’s milk, no artificial hormone, television ad, 2008
- Trend toward conveying about the (local) milk source—a point of pride and taste differentiation
- Kemps Select scores points on fresh taste and humor
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- Figure 47: Kemps Select, Local milk, television ad, 2008
- Functional and pro-health innovation
- Smart Balance new fat-free milk attempts to attract health-minded consumers
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- Figure 48: Smart Balance, Delicious Fat-free milk and 1% heart-healthy milk, television ad, 2008
- Promoting the natural goodness of milk
- Oakhurst: naturally healthy, naturally good
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- Figure 49: Oakhurst milk, Nutrient-rich Oakhurst milk, television ad, 2008
- Dean educates about the benefits of calcium-rich milk
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- Figure 50: Dean’s milk, milk and calcium, television ad, 2008
The Milk Consumer: Usage, Types and Frequency
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- Trends in household consumption of milk
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- Figure 51: Trends in household consumption of milk, by type, 2004-08
- Households with children are primary consumers of whole milk and flavored milk
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- Figure 52: Household milk consumption, by type, by presence of children, July 2007-September 2008
- Ethnic households continue to use whole milk, but are likely to move to low-fat/skim milk
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- Figure 53: Household milk consumption, by type, by race/Hispanic origin, July 2007-September 2008
- Personal incidence of using milk is lower than that of carbonated drinks and bottled water
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- Figure 54: Incidence of individual consumption of milk, by key demographics, January 2009
- Trends in frequency of drinking milk in U.S. households
- Households are using less milk in 2008, compared to 2006
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- Figure 55: Trends in frequency of drinking milk, 2004-08
- Households with children, large households, and Hispanic households consume most milk
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- Figure 56: Household frequency* of drinking milk, by key demographics, July 2007-September 2008
Attitudes: Growth Hormone, Organic Milk, Green Packaging and Other Beverages
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- Figure 57: Attitudes toward growth hormone in milk, green milk packaging, and new age beverages, by gender, January 2009
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- Figure 58: Attitudes toward growth hormone in milk, green milk packaging, and new age beverages, by race/Hispanic origin, January 2009
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- Figure 59: Attitudes toward growth hormone in milk, green milk packaging, and new age beverages, by presence of children, January 2009
- Concern about growth hormones and media
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- Figure 60: Growth hormone awareness and reaction, by age, January 2009
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Attitudes toward Using Different Types of Milk and Interchangeability with Other Beverages
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- Figure 61: Attitudes toward different types of milk and interchangeability with other beverages, by age, January 2009
- How milk is used
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- Figure 62: How milk is used, by gender, January 2009
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- Figure 63: How milk is used, by race/Hispanic origin, January 2009
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- Figure 64: How milk is used, by presence of children, January 2009
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Reasons for Choosing Milk for Self and Children
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- Reasons for drinking milk
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- Figure 65: Reasons for drinking milk, by presence of children, January 2009
- Parents’ attitudes and behaviors regarding milk use for children
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- Figure 66: Parents’ attitudes and behaviors regarding milk, by race/Hispanic origin, January 2009
Reasons for Not Drinking Milk
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- Figure 67: Reasons for not drinking milk, by gender, January 2009
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- Figure 68: Reasons for not drinking milk, by race/Hispanic origin, January 2009
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Cluster Analysis
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- Lowest drinkers, health-unimpressed
- Good tasting, cereal users
- Environmental and hormonal-concerned
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- Figure 69: Milk consumer clusters, January 2009
- Figure 70: Incidence of individual consumption of yogurt drinks, by milk consumer clusters, January 2009
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- Figure 71: Attitudes toward growth hormone in milk, green milk packaging, and new age beverages, by milk consumer clusters, January 2009
- Figure 72: Attitudes toward different types of milk and interchangeability with other beverages, by milk consumer clusters, January 2009
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- Figure 73: Growth hormone awareness and reaction, by milk consumer clusters, January 2009
- Figure 74: How milk is used, by milk consumer clusters, January 2009
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- Figure 75: Reasons for drinking milk, by milk consumer clusters, January 2009
- Figure 76: Milk consumer clusters, by gender, January 2009
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- Figure 77: Milk consumer clusters, by age, January 2009
- Figure 78: Milk consumer clusters, by household income, January 2009
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- Figure 79: Milk consumer clusters, by race, January 2009
- Figure 80: Milk consumer clusters, by Hispanic origin, January 2009
Custom Consumer Groups
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- Moms, and adults aged 18-34 are the primary target consumer in the market
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- Figure 81: Personal incidence of using milk, by moms and adults aged 18-34 and ethnicity/Hispanic origin, January 2009
IRI/Builders Panel Data: Key Household Purchase Measures
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- Overview of milk
- Refrigerated skim/low-fat milk
- Consumer insights on key purchase measures—refrigerated skim/low-fat milk
- Brand map
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- Figure 82: Brand map, selected brands of refrigerated skim/low-fat milk, by household penetration, 2008*
- Brand leader characteristics
- Key purchase measures
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- Figure 83: Key purchase measures for the top brands of refrigerated skim/low-fat milk, by household penetration, 2008*
- Refrigerated flavored milk/eggnog/buttermilk
- Consumer insights on key purchase measures—refrigerated flavored milk/eggnog/buttermilk
- Brand map
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- Figure 84: Brand map, selected brands of refrigerated flavored milk/eggnog/buttermilk, by household penetration, 2008*
- Brand leader characteristics
- Key purchase measures
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- Figure 85: Key purchase measures for the top brands of refrigerated flavored milk/eggnog/buttermilk, by household penetration, 2008*
- Refrigerated whole milk
- Consumer insights on key purchase measures—refrigerated whole milk
- Brand map
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- Figure 86: Brand map, selected brands of refrigerated whole milk, by household penetration, 2008*
- Brand leader characteristics
- Key purchase measures
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- Figure 87: Key purchase measures for refrigerated whole milk, by household penetration, 2008*
Appendix: Other Useful Consumer Tables
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- Attitudes toward growth hormone in milk, milk packaging, and new-age milk beverages
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- Figure 88: Attitudes toward growth hormone in milk, green milk packaging, and new age beverages, by age, January 2009
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- Figure 89: Attitudes toward growth hormone in milk, green milk packaging, and new age beverages, by income, January 2009
- Attitudes toward using different types of milk and interchangeability with other beverages
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- Figure 90: Attitudes toward different types of milk and interchangeability with yogurt drinks, by race/Hispanic origin, January 2009
- How milk is used?
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- Figure 91: How milk is used, by age, January 2009
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- Figure 92: How milk is used, by income, January 2009
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- Figure 93: How milk is used, by region, January 2009
Reasons for Choosing Milk for Self and Children
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- Reasons for drinking milk
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- Figure 94: Reasons for drinking milk, by gender, January 2009
- Figure 95: Reasons for drinking milk, by age, January 2009
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- Figure 96: Reasons for drinking milk, by race/Hispanic origin, January 2009
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- Figure 97: Reasons for drinking milk, by income, January 2009
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- Figure 98: Reasons for drinking milk, by region, January 2009
- Parents’ attitudes and behaviors regarding milk consumption for children
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- Figure 99: Parents’ attitudes and behaviors regarding milk, by gender, January 2009
Appendix: Trade Associations
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- National and international associations
- Regional associations
- State associations
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