Table of Contents
Introduction
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- Definition
- Abbreviations
Executive Summary
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- The market
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- Figure 1: Forecast of UK retail sales of dairy drinks, milk and cream, by value, 2006-16
- All types of white milk show a decline
- Home cooks willing to pay more for cream
- Flavoured milk shows enviable growth
- Forecast
- Market factors
- Milk loses out to other dairy products
- Price discounting has repercussions on the supply chain
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- Figure 2: Overview of challenges facing the UK milk supply chain, 2012
- Companies, brands and innovation
- Mature liquid milk market is fiercely competitive
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- Figure 3: Estimated brand shares in the liquid white milk market, by value, 2011 (est)
- FRijj’s Incredible range shakes up the traditional trio of flavours
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- Figure 4: Estimated brand shares in the flavoured milk market, by value, 2011 (est)
- Social media helps attract young adults
- Packaging changes reinvigorate the fixture
- The consumer
- Milk consumption relies on families’ heavy usage
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- Figure 5: Usage of milk in last 12 months in the household, Volume Importance Index, selected groups, 2011
- Semi-skimmed retains its market dominance
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- Figure 6: Milk usage, by type, in the last three months, March 2012
- Communicating versatility brings new opportunities for cream
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- Figure 7: Cream usage, by type, in the last three months, March 2012
- Healthier milks show potential, but the taste is off-putting to some
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- Figure 8: Attitudes towards milk, March 2012
- Reluctance to pay more for milk
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- Figure 9: Attitudes towards milk, March 2012
- Regional milks have pulling power
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- Figure 10: Attitudes towards added value in milk/cream, March 2012
- Indifference shown towards packaging innovation
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- Figure 11: Attitudes towards milk/cream packaging, March 2012
- What we think
Issues in the Market
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- How can brands convert the emotional support for British farmers’ livelihoods into higher premiums for the industry?
- How can leveraging the local provenance angle encourage loyalty within the white milk market?
- How can milk compete more effectively with other cold drinks?
- How can flavoured milk expand beyond its current limitations?
Future Opportunities
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- Trend: Without a Care
- Trend: Edutainment
Internal Market Environment
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- Key Points
- The milk challenge
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- Figure 12: Percentage change in average consumption per person per week of dairy products, 2000-2010 and 2009-10
- Positioning milk at the forefront of the health debate
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- Figure 13: Consumer health targets, in response to the question “Thinking about your health, which of the following, if any have you tried to do in the last 12 months?”, June 2011
- Organic milk losing out to conventional milk
- Increasing milk’s chances in the soft drink ring
- Price sensitivity limits prospects of adding value to milk
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- Figure 14: Agreement with selected lifestyle statements related to cost, 2007-11
- Further steps along the Roadmap towards a sustainable future for the dairy industry
Broader Market Environment
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- Key Points
- The ‘four pint’ benchmark
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- Figure 15: Overview of challenges facing the UK milk supply chain, 2012
- Aggressive pricing hits processors’ pockets
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- Figure 16: Number of dairy producers in the UK (000s), 2002-10
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- Figure 17: Monthly milk prices, UK, 2007-11
- Squeeze on consumer spending continues
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- Figure 18: Monthly consumer confidence index, January 2007-December 2011
- Heavy reliance on families as core milk and cream consumers
- Nurturing the ‘grey pound’
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- Figure 19: Forecast adult population trends, by lifestage, 2006-16
- Figure 20: Forecast adult population trends, by age group, 2011-16
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- Figure 21: Complaints suffered from in the last 12 months, by age, 2011
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- Figure 22: Usage of milk in last 12 months in the household, by household size, 2011
Competitive Context
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- Key Points
- Competing for the breakfast occasion
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- Figure 23: UK retail value sales of yogurt and breakfast cereal markets, at current prices, 2007-11
- Fizzy drinks dominate the crowded soft drinks market
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- Figure 24: UK retail value sales of selected markets competing with milk, at current prices, 2007-11
Strengths and Weaknesses
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- Strengths
- Weaknesses
Who’s Innovating?
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- Key Points
- High levels of NPD activity
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- Figure 25: Share of new launches of dairy drinks, milk and cream of NPD in dairy and in the total UK food market, 2008-11
- Figure 26: Product launches within the UK dairy drinks, milk & cream market, by sub-category, 2008-11
- Own-label domination
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- Figure 27: Product launches within the UK dairy drinks, milk & cream market, by own-label vs branded split, 2008-11
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- Figure 28: Product launches within the UK dairy drinks, milk & cream market, by sub-category and own-label, 2011
- FRijj shakes up flavoured milk with new flavour combos
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- Figure 29: Top ten flavour components in flavoured milk launches, 2008-11
- Encouraging milk consumption among children
- Cream targets both ends of the indulgence spectrum
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- Figure 30: Top ten flavour components in cream launches, 2008-11
- Environmentally-friendly packaging is increasingly common
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- Figure 31: Top ten claims of new product launches within the UK dairy drinks, milk & cream market, 2008-11
- Tinted milk bottle lids increase recycling opportunities
- New designs by Dairy Crest create a new lightweight milk bottle
- Plus and minus claims add value to milk
Market Size and Forecast
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- Key Points
- Market trends in dairy drinks, milk and cream
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- Figure 32: UK retail* sales of dairy drinks, milk and cream, 2006-16
- Competitive white milk prices fail to stimulate sales
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- Figure 33: UK retail* sales of white milk, by value and volume, 2006-16
- Cream value sales flourish at the expense of volume sales
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- Figure 34: UK retail sales of cream, by value and volume, 2006-16
- Flavoured milk represents a lucrative niche for processors
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- Figure 35: UK retail sales of flavoured milk, by value and volume, 2006-16
- Forecast
- Milk, flavoured milk and cream market to reach £5.4 billion
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- Figure 36: Forecast of UK retail sales of dairy drinks, milk and cream, by value, 2006-16
- Value growth of 12% forecast for white milk by 2016
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- Figure 37: Forecast of UK retail sales of white milk, by volume, 2006-16
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- Figure 38: Forecast of UK retail sales of white milk, by value, 2006-16
- Value sales of cream forecast to grow by 11% by 2016
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- Figure 39: Forecast of UK retail sales of cream, by value, 2006-16
- Flavoured milk growth expected to continue
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- Figure 40: Forecast of UK retail sales of flavoured milk, by value, 2006-16
- Forecast methodology
Segment Performance
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- Key Points
- Semi-skimmed leads the decline
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- Figure 41: Retail sales of fresh and long-life white milk, by type, value and volume, 2009-11
- Lactose-free is only fresh milk sector to grow in 2011
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- Figure 42: Retail sales of fresh white milk, by type, by value, 2009-11
- Figure 43: Retail sales of fresh white milk, by type, by volume, 2009-11
- Cream continues to benefit from eating-in trends and higher prices
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- Figure 44: UK retail sales of cream, by type, by value, 2009-11
- Figure 45: UK retail sales of cream, by type, by volume, 2009-11
Market Share
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- Key Points
- Liquid milk – few winners emerge in the ongoing price war
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- Figure 46: Estimated manufacturer shares of own-label liquid milk sales, by volume, 2011
- Figure 47: Estimated brand shares in the liquid white milk market, by value, 2010-11
- FRijj holds its lead
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- Figure 48: Estimated brand shares in the flavoured milk market, by value, 2010-11
Companies and Products
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- Alpro
- Arla Foods
- Dairy Crest
- FrieslandCampina
- Nestlé
- Robert Wiseman Dairies
- St. Helen’s Farm
- Guernsey Dairy
Brand Communication and Promotion
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- Key Points
- Major players stagger above-the-line investment
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- Figure 49: Main monitored media advertising spend on dairy drinks, milk and cream, 2007-11
- Arla Foods’ contribution accounts for £6 in every £10 of above the line spend
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- Figure 50: Main monitored media advertising spend on dairy drinks, milk & cream, by advertiser, 2007-11
- ‘The milk matters’ to Cravendale families
- Alpro invites young women to feed their curiosity
- FRijj targets its 25-34-year-old male base with social media
- Yazoo redirects its marketing towards young men in 2012
- Milk Marketing Forum cashes in on Mad Men success
- Robert Wiseman creates a charity tie-up with Wallace & Gromit at breakfast time
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- Figure 51: Main monitored media advertising spend on dairy drinks, milk & cream, by brand, 2007-11
- Cinema, radio and online media become more relevant in 2011
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- Figure 52: Main monitored media advertising spend on dairy drinks, milk and cream, by media type, 2007-11
Consumer – Trends in Milk Usage
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- Key Points
- Increasing frequency of use is milk’s main challenge
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- Figure 53: Usage of milk in last 12 months in the household, 2009-11
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- Figure 54: Usage of milk, breakfast cereals, tea and coffee in the last 12 months, 2010-11
- Usage reveals an over-reliance on families
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- Figure 55: Usage of milk in last 12 months in the household, Volume Importance Index, selected groups, 2011
- Fresh pasteurised milk sees off pretenders
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- Figure 56: Types of milk used most often in the last 12 months in the household, 2008-11
Consumer – Usage of Milk and Cream by Type and Occasion
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- Key Points
- Milk and cream preferences
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- Figure 57: Milk usage, by type, in the last three months, March 2012
- Semi-skimmed is the favourite but full-fat milk holds its ground
- Milk and dairy alternatives invite a broader audience
- Too soon for 1% fat milk sales to lose momentum as it caters for current trends
- Filtered milk attracts high-income households
- Flavoured milk – loved by kids and adults
- Breakfast and hot drinks are the main occasions for milk
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- Figure 58: Milk usage, by occasion, in the last three months, March 2012
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- Figure 59: Milk usage, by occasion, by age group, in the last three months, March 2012
- Cream preferences
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- Figure 60: Cream usage, by type, in the last three months, March 2012
- Cream maintains its ‘sweet’ associations
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- Figure 61: Cream usage, by occasion, in the last three months, March 2012
- Milk and cream repertoires
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- Figure 62: Repertoire of milk and cream usage, by type, in the last three months, March 2012
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- Figure 63: Repertoire of milk usage, by type, by age and presence of children in the household, in the last three months, March 2012
Consumer – Attitudes Towards Milk
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- Key Points
- Few consumers dispute milk’s health credentials
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- Figure 64: Attitudes towards healthiness of milk, March 2012
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- Figure 65: Agreement with the statement “I am wary of the taste of healthier milk”, by type of milk used in the last three months, March 2012
- Flavoured milk enjoys a boost from milk’s healthy halo effect
- Tough opposition to paying more for milk
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- Figure 66: Attitudes towards milk, March 2012
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- Figure 67: Agreement with the statement “It’s worth paying more for branded milk”, by type of milk used in the last three months, March 2012
Consumer – Attitudes Towards Added Value in Milk
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- Key Points
- High level of demand for locally-sourced milk and cream
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- Figure 68: Attitudes towards added value in milk/cream, March 2012
- Two in five motivated by added health benefits
- Packaging struggles to incite excitement
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- Figure 69: Attitudes towards milk/cream packaging, March 2012
Milk and Cream Target Groups
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- Key Points
- Four target groups
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- Figure 70: Target groups for milk and cream, March 2012
- Selective Shoppers (43%)
- Farmers’ Friends (22%)
- Low-Fat Fans (17%)
- Natural Goodness (18%)
Appendix – Broader Market Environment
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- Figure 71: Forecast adult population trends, by socio-economic group, 2006-16
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Appendix – Competitive Context
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- Figure 72: Consumption of breakfast cereals, 2009-11
- Figure 73: Consumption of bread, 2009-11
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Appendix – Who’s Innovating?
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- Figure 74: Product launches within the UK dairy drinks, milk & cream market, by brand, 2008-11
- Figure 75: Product launches within the UK flavoured milk market, branded vs own-label, 2008-11
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Appendix – Market Size and Forecast
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- Figure 76: Forecast of UK retail sales of dairy drinks, milk and cream, by volume, 2006-16
- Figure 77: Forecast of UK retail sales of dairy drinks, milk and cream, best and worst case forecast, by volume, litres, 2011-16
- Figure 78: Forecast of UK retail sales of dairy drinks, milk and cream, best and worst case forecast, by value, 2011-16
- White milk
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- Figure 79: Forecast of UK retail sales of white milk, best and worst case forecast, by volume, litres, 2011-16
- Figure 80: Forecast of UK retail sales of white milk, best and worst case forecast, by value, 2011-16
- Cream
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- Figure 81: Forecast of UK retail sales of cream, by volume, litres, 2006-16
- Figure 82: Forecast of UK retail sales of cream, best and worst case forecast, by volume, litres, 2011-16
- Figure 83: Forecast of UK retail sales of cream, best and worst case forecast, by value, 2011-16
- Flavoured milk
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- Figure 84: Forecast of UK retail sales of flavoured milk, by volume, litres, 2006-16
- Figure 85: Forecast of UK retail sales of flavoured milk, best and worst case forecast, by volume, litres, 2011-16
- Figure 86: Forecast of UK retail sales of flavoured milk, best and worst case forecast, by value, 2011-16
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Appendix – Brand Communication and Promotion
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- Figure 87: Main monitored media advertising spend on dairy drinks, milk and cream, 2007-11
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Appendix – Consumer – Trends in Milk Usage
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- Figure 88: Varieties of milk used most often in the last 12 months in the household, 2008-11
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- Figure 89: Usage of milk in last 12 months in the household, by demographics, 2011
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Appendix – Usage of Milk and Cream by Type and Occasion
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- Figure 90: Milk usage, by type, March 2012
- Figure 91: Most popular types of milk used, by all users, by demographics, March 2012
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- Figure 92: Next most popular types of milk used, by all users, by demographics, March 2012
- Figure 93: Other types of milk used, by all users, by demographics, March 2012
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- Figure 94: Most popular types of milk used personally, by demographics, March 2012
- Figure 95: Next most popular types of milk used personally, by demographics, March 2012
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- Figure 96: Other types of milk used personally, by demographics, March 2012
- Figure 97: Repertoire of milk usage, by type of milk, by demographics, March 2012
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- Figure 98: Most popular types of cream used, by demographics, March 2012
- Figure 99: Next most popular types of cream used, by demographics, March 2012
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- Figure 100: Repertoire of cream usage, by type of cream, by demographics, March 2012
- Figure 101: Milk usage, by occasion, by demographics, March 2012
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- Figure 102: Repertoire of milk usage, by occasion, by demographics, March 2012
- Figure 103: Cream usage, by occasion, by demographics, March 2012
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Appendix – Consumer Attitudes Towards Milk
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- Figure 104: Attitudes towards milk, March 2012
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- Figure 105: Agreement with the statements ‘I am wary of the taste of healthier milk’ and ‘It is worth paying more for milk that stays fresher for longer’, by demographics, March 2012
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- Figure 106: Agreement with the statements ‘Milk has a range of health benefits’ and ‘Milk is a good source of nutrients’, by demographics, March 2012
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- Figure 107: Agreement with the statements ‘‘Flavoured milk is a good way to get the kids to drink milk’ and ‘Flavoured milk is less healthy than unflavoured milk’, by demographics, March 2012
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- Figure 108: Agreement with the statements ‘The price of milk affects where I do my grocery shopping’ and ‘I prefer to get my calcium intake from other sources’, by demographics, March 2012
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- Figure 109: Agreement with the statements ‘It is worth paying more for branded milk’ and ‘I would be willing to pay more for milk from specific geographical areas’, by demographics, March 2012
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- Figure 110: Agreement with the statement ‘It is worth paying more for organic milk’, by demographics, March 2012
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Appendix – Attitudes Towards Added Value in Milk
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- Figure 111: Attitudes towards added value in milk/cream, March 2012
- Figure 112: Agreement with the statements ‘I would like to see a wider variety of pack sizes available’ and ‘I would be willing to pay more for milk/cream that guarantees higher animal welfare’, by demographics, March 2012
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- Figure 113: Agreement with the statements ‘I would like to know more about where my milk/cream comes from’ and ‘I like to try new packaging formats eg milk bags’, by demographics, March 2012
- Figure 114: Agreement with the statements ‘I would only try new formats if they were on promotion’ and ‘I would like to see more locally sourced milk/cream at my supermarket’, by demographics, March 2012
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- Figure 115: Agreement with the statements ‘I would like to see more milk/cream products with added benefits’ and ‘I would be willing to pay more for milk/cream if the extra money went to the farmers’, by demographics, March 2012
- Figure 116: Agreement with the statement ‘I would like to see more healthier milk/cream products’, by demographics, March 2012
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Appendix – Target Groups
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- Figure 117: Attitudes towards added value in milk/cream, by target groups, March 2012
- Figure 118: Milk usage, by type, by target groups, March 2012
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- Figure 119: Cream usage, by type, by target groups, March 2012
- Figure 120: Milk usage, by occasion, by target groups, March 2012
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- Figure 121: Cream usage, by occasion, by target groups, March 2012
- Figure 122: Attitudes towards milk, by target groups, March 2012
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- Figure 123: Attitude towards healthy lifestyles, by target groups, March 2012
- Figure 124: Target groups, by demographics, March 2012
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