Table of Contents
Overview
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- What you need to know
- Products covered in this Report
Executive Summary
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- The market
- Falling farmgate milk prices affect the entire market
- Values to remain down but slight volume growth to 2020
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- Figure 1: UK retail value sales of milk, milk drinks and cream, 2010-20
- Cows’ milk dominates but strong growth in almond and coconut milk
- Future of the market remains uncertain
- Companies and brands
- Own-label retains dominance in milk, but values down
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- Figure 2: Leading brands’ shares in the UK retail white milk market, by value, 2014/15*
- Brands gain share in flavoured milk
- New propositions in white milk
- Arla dominates advertising spend but dairy-free brands up their activity
- The consumer
- Age bias in milk usage could inhibit future growth
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- Figure 3: Usage of cows’ milk and alternative milk drinks, February 2016
- 55% of milk users are willing to pay more than the supermarkets charge
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- Figure 4: How much milk users would pay for 4 pints (2.272 litres) of milk, February 2016
- Only half of milk buyers are swayed by price
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- Figure 5: Factors considered important when buying milk, February 2016
- Healthier and on-the-go versions could re-energise the category
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- Figure 6: Interest in new concepts in milk, milk drinks and cream, February 2016
- Further push on health could help burnish milk’s image
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- Figure 7: Attitudes towards milk, milk drinks and cream, February 2016
- Imperative need to promote farmer relations
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- Figure 8: Attitudes towards buying milk, February 2016
- What we think
Issues and Insights
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- Ensuring fair pay for farmers is crucial to avoid a backlash
- The facts
- The implications
- A focus on health could prove beneficial
- The facts
- The implications
- On-the-go formats could help to re-engage younger consumers
- The facts
- The implications
The Market – What You Need to Know
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- Falling farmgate milk prices affect the entire market
- Values to remain down but slight volume growth to 2020
- Cows’ milk dominates but strong growth in almond and coconut milk
- Cooking supports culinary cream
- International dairy market remains a source of uncertainty
- New dietary guidelines reduce dairy recommendation
Market Size and Forecast
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- Falling milk prices exert influence over entire market
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- Figure 9: UK retail value sales of white milk*, cream and flavoured milk, by segment, 2010-20
- Figure 10: UK retail volume sales of white milk*, cream and flavoured milk, by segment, 2010-20
- No value recovery imminent
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- Figure 11: UK retail value sales of milk, milk drinks and cream, 2010-20
- White milk values down but volumes slightly up
- No ‘quick-fix’ solution for milk prices on the horizon
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- Figure 12: UK retail value sales of white milk, 2010-20
- Health concerns affect cream
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- Figure 13: UK retail value sales of cream, 2010-20
- Strong growth potential for flavoured milk
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- Figure 14: UK retail value sales of flavoured milk, 2010-20
- Forecast methodology
Market Segmentation
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- Cows’ milk values down but volume sales up
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- Figure 15: UK retail value sales of white milk, by fresh and long-life, 2014-15
- Figure 16: UK retail volume sales of white milk, by fresh and long-life, 2014-15
- Cows’ milk dominates but almond and coconut milk growing strongly
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- Figure 17: UK retail value sales of white milk, by type, 2014-15
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- Figure 18: UK retail volume sales of white milk, by type, 2014-15
- Volume growth for goats’ milk
- Organic milk yet to see benefit of rising incomes
- Double cream sees volume growth despite health trend
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- Figure 19: UK retail value sales of cream, by type, 2014-15
- Figure 20: UK retail volume sales of cream, by type, 2014-15
- Scratch cooking trend benefits culinary creams
- New varieties boost flavoured milk
- Lack of innovation impedes milk modifiers
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- Figure 21: UK retail value sales of flavoured milk, milk smoothies and milk flavourings, 2014-15
- Figure 22: UK retail volume sales of flavoured milk, milk smoothies and milk flavourings, 2014-15
Market Drivers
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- Weak milk export demand puts downward pressure on prices
- Supermarket price wars fuel retail price deflation
- ‘Brexit’ debate raises further uncertainty
- Need to engage younger consumers
- New government health advice cuts dairy intake recommendation
- Sugar tax could benefit dairy drinks
Companies and Brands – What You Need to Know
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- Own-label retains dominance in white milk but values fall
- Brands gain share in flavoured milk
- New propositions in white milk
- Arla dominates advertising spend but dairy-free brands up their activity
Market Share
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- Own-label continues to dominate white milk
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- Figure 23: Leading brands’ sales and shares in the UK white milk market, by value and volume, 2013/14-2014/15
- Figure 24: Leading manufacturers’ sales and shares in the UK white milk market, by value and volume, 2013/14-2014/15
- Expansion of free-from market boosts Alpro
- Sale of Dairy Crest’s milk and cream business to Müller ends 2015
- Distribution gains see Graham’s grow
- Own-label remains dominant in cream
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- Figure 25: Leading brands’ sales and shares in the UK cream market, by value and volume, 2013/14-2014/15
- Figure 26: Leading manufacturers’ sales and shares in the UK cream market, by value and volume, 2013/14-2014/15
- Own-label loses market share in flavoured milk
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- Figure 27: Leading brands’ sales and shares in the UK flavoured milk market, by value and volume, 2013/14-2014/15
- Figure 28: Leading manufacturers’ sales and shares in the UK flavoured milk market, by value and volume, 2013/14-2014/15
- Mixed results for Mars brands
- Weetabix adds £8 million
Launch Activity and Innovation
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- Little NPD in white cows’ milk
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- Figure 29: New product launches in the UK milk, dairy drinks and cream market, by sub-category, 2011-15
- Arla targets the health-aware through Best of Both Milk
- Morrisons launches Milk for Farmers
- Flavoured milk brands look to flavour innovation to win new users
- Inspiration from the dessert category
- Coffee flavours
- High-protein proposition
- Further potential for low-sugar flavoured milk
- Growth in dairy-free
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- Figure 30: New product launches in the UK milk, dairy drinks and cream market, by top 20 claims, 2011-15
Advertising and Marketing Activity
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- Arla has the lion’s share of adspend in 2015
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- Figure 31: Total above-the line, online display and direct mail advertising expenditure on milk, milk drinks & cream (sorted by top ten advertisers in 2015), 2011-15
- Focus on the Cravendale brand
- First Lactofree television advert for three years
- White Wednesdays: TV advert promotes farmers’ contribution
- White Wednesdays: Public events raise profile further
- Best of Both Milk focuses on joy
- Alpro and Blue Diamond boost plant-based milk adspend
- Alpro promotes general health benefits to appeal to a wide audience
- Nielsen Media Research coverage
The Consumer – What You Need to Know
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- Age bias in milk usage could inhibit future growth
- 55% of milk users are willing to pay more than the supermarkets charge
- Only half of milk buyers are swayed by price
- Healthier and on-the-go versions could re-energise the category
- Further push on health could help burnish milk’s image
- Consumers divided on plant-based milks
- Imperative need to promote farmer relations
Usage of Milk
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- Standard cows’ milk remains most popular but has ageing user base
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- Figure 32: Usage of cows’ milk and alternative milk drinks, February 2016
- Plant-based milks attract young & affluent user base
- Plant-based milks more popular among women than men
- Semi-skimmed the most commonly used milk type
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- Figure 33: Usage of milk and milk drinks, by type, February 2016
- Whole milk appeals to families but not over-55s
Usage of Cream
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- Lack of versatility limits cream usage
- Encouraging more varied use of cream
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- Figure 34: Usage of cream, by type, February 2016
- Double cream the most commonly used cream type
- Plant-based cream usage low
How Much Consumers Are Prepared to Pay for Milk
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- 55% are willing to pay more than the supermarkets charge for milk
- 27% are willing to spend £1.50 or more
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- Figure 35: How much milk users would pay for 4 pints (2.272 litres) of milk, February 2016
Factors Considered Important When Buying Milk
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- Buyers divided on price
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- Figure 36: Factors considered important when buying milk, February 2016
- Ethical claims could be a differentiator
- Farmers’ pay provokes reactions among many
- Companies look to leverage their support to farmers
- Welfare claims spark minority interest
- Specific animal welfare claims could help to differentiate products
Interest in New Concepts
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- Fortified milk interests one in five
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- Figure 37: Interest in new concepts in milk, milk drinks and cream, February 2016
- Reduced-sugar flavoured milk interests one in four parents
- Scope for NPD in on-the-go milk
Attitudes towards Milk, Dairy Drinks & Cream
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- Milk still seen as providing health benefits
- Minority recognise milk’s credentials in hydration
- Opinion divided on plant-based milks on health
- Few see plant-based milk as excelling on taste
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- Figure 38: Attitudes towards milk, milk drinks and cream, February 2016
Attitudes towards Buying Milk
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- Confusion over farmers’ pay
- Operators take different routes to reassuring shoppers
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- Figure 39: Attitudes towards buying milk, February 2016
- Need to ensure good supplier relations or risk backlash
- Women show the greatest concern for farmers
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Figure 40: Best- and worst-case forecasts for retail value sales of milk, milk drinks and cream 2015-20
- Figure 41: Best- and worst-case forecasts for UK retail volume sales of milk, milk drinks and cream 2015-20
- Figure 42: Best- and worst-case forecasts for UK retail value sales of white milk 2015-20
- Figure 43: Best- and worst-case forecasts for UK retail volume sales of white milk 2015-20
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- Figure 44: Best- and worst-case forecasts for UK retail value sales of cream 2015-20
- Figure 45: Best- and worst-case forecasts for UK retail volume sales of cream 2015-20
- Figure 46: Best- and worst-case forecasts for UK retail value sales of flavoured milk 2015-20
- Figure 47: Best- and worst-case forecasts for UK retail volume sales of flavoured milk 2015-20
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- Figure 48: UK retail volume sales of white milk, 2010-20
- Figure 49: UK retail volume sales of cream, 2010-20
- Figure 50: UK retail volume sales of flavoured milk, 2010-20
- Forecast Methodology
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Appendix – Advertising & Marketing
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- Figure 51: Total above-the line, online display and direct mail advertising expenditure on milk, milk drinks & cream, by segment 2011-15
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