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
- Price rises in all segments in 2017
- Weakness of white milk and cream to continue to overshadow the category over 2018-22
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- Figure 1: UK retail value sales of milk, milk drinks and cream, 2012-22
- Cow’s milk continues to dominate white milk but sees sales slip
- Cream’s decline continues, further sales growth for flavoured milk
- Public health focus both hinders and boosts the category
- Companies and brands
- Own-label continues to dominate milk
- Arla brands see mixed fortunes
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- Figure 2: UK retail sales of white milk^, by leading brands, by value, 2017/18*
- Dairy alternatives lead on L/N/R sugar
- Growth in fortified launches
- Advertising on milk and cream falls in 2017
- Dairy industry steps up marketing activity
- The consumer
- 96% of UK adults use milk
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- Figure 3: Usage of milk, by type, February 2018
- Most users would pay more than £1 for a four-pint bottle of milk
- Niche retail availability limits uptake of ethical milks
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- Figure 4: Awareness and usage of added-value milks, by type, February 2018
- Consumer interest in animal welfare does not always translate to buying
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- Figure 5: Behaviours relating to milk, dairy drinks and cream, February 2018
- Multiple barriers to drinking milk out of home
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- Figure 6: Attitudes towards milk, dairy drinks and cream, February 2018
- What we think
Issues and Insights
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- Focus on iodine should help to boost milk’s health image
- The facts
- The implications
- Need for ethical dairy systems to highlight their animal welfare credentials
- The facts
- The implications
- Social media can help to drive cream cooking occasions
- The facts
- The implications
The Market – What You Need to Know
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- Price rises in all segments in 2017
- Weakness of white milk and cream to continue to overshadow the category over 2018-22
- Cow’s milk continues to dominate white milk but sees sales slip
- Cream’s decline continues, further sales growth for flavoured milk
- Public health focus both hinders and boosts the category
Market Size and Forecast
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- Price volatility of white milk impacts the entire market from 2012-17
- Inflation in all segments in 2017
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- Figure 7: UK retail value sales of white milk*, cream and flavoured milk, by segment, 2012-22
- Figure 8: UK retail volume sales of white milk*, cream and flavoured milk, by segment, 2012-22
- Weakness of white milk and cream to continue to overshadow the category over 2018-22
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- Figure 9: UK retail value sales of milk, milk drinks and cream, 2012-22
- Retailer price competition set to curb white milk inflation over 2018-22
- White milk to lose out from cow’s milk’s ageing user base
- Growth in non-dairy milks to slow
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- Figure 10: UK retail value sales of white milk, 2012-22
- Health concerns and changed cooking habits to continue to impede cream volume sales over 2018-22
- Faster inflation expected for cream than milk
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- Figure 11: UK retail value sales of cream, 2012-22
- Flavoured milk volume sales growth to lose momentum from 2018-22
- Slower inflation expected in flavoured milk for 2018-22 than in 2017
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- Figure 12: UK retail value sales of flavoured milk, 2012-22
- Forecast methodology
Market Segmentation
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- Cow’s milk sees further volume decline in 2017
- Rising prices push up value sales despite falling volumes
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- Figure 13: Retail value sales of white milk, by fresh and long-life, 2015-17
- Figure 14: Retail volume sales of white milk, by fresh and long-life, 2015-17
- Conventional cow’s milk remains dominant
- Filtered milk struggles to distinguish itself to consumers
- Further strong growth for almond and coconut milks
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- Figure 15: Retail value sales of white milk, by type, 2015-17
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- Figure 16: Retail volume sales of white milk, by type, 2015-17
- Health concerns and consumers’ more varied meal repertoires hit cream
- Cream prices rise sharply in 2017
- Double cream remains the leading cream type
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- Figure 17: UK retail value sales of cream, by type, 2015-17
- Figure 18: UK retail volume sales of cream, by type, 2015-17
- Second year of growth for flavoured milk
- Pound’s depreciation drives up flavoured milk prices in 2017
- Artificial image impedes milk modifiers
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- Figure 19: UK retail value sales of flavoured milk, milk smoothies and milk flavourings, 2015-17
- Figure 20: UK retail volume sales of flavoured milk, milk smoothies and milk flavourings, 2015-17
Market Drivers
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- Milk prices continue to rise for most of 2017
- Pound’s weakness supports export demand and ups price of flavoured milk in 2017
- Uncertainties surround government’s post-Brexit policies
- Public health focus both hinders and boosts the category
- A quarter of users have cut back on cow’s milk
- Flavoured milk benefits from its exemption from the sugar tax
Companies and Brands – What You Need to Know
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- Own-label continues to dominate milk
- Arla brands see mixed fortunes
- Dairy alternatives lead on L/N/R sugar
- Growth in fortified launches
- Advertising on milk and cream falls in 2017
- Dairy industry steps up marketing activity
Market Share
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- Own-label retains its lead in white milk
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- Figure 21: UK retail sales of white milk^, by leading brands, 2015/16-2017/18
- Figure 22: UK retail sales of white milk^, by leading brand owners, 2015/16-2017/18
- Mixed results for Arla brands
- Arla acquires part of Yeo Valley’s dairy business
- Alpro continues to benefit from the growth in the free-from market
- Danone completes WhiteWave acquisition
- Own-label remains leader of declining cream market
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- Figure 23: UK retail sales of cream, by leading brands, 2015/16-2017/18
- Figure 24: UK retail sales of cream, by leading brand owners, 2015/16-2017/18
- Yazoo sales recover in buoyant flavoured milk market
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- Figure 25: UK retail sales of flavoured milk, milk flavourings and dairy smoothies, 2015/16-2017/18
- Further struggles for Frijj
- Continued NPD activity drives further growth for own-label
- Unusual flavours boost smaller brands
Launch Activity and Innovation
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- L/N/R allergen claims climb rapidly in 2017
- Brands and retailers explore less commonly seen ingredients
- Rude Health innovates with milk types
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- Figure 26: New product launches in the UK milk, dairy drinks and cream market^, by top 20 claims (sorted by 2017), 2014-18
- Retailers build up their lactose-free ranges
- Dairy alternatives lead on L/N/R sugar claims in 2017
- Smaller brands explore L/N/R sugar flavoured non-dairy milk drinks
- Growth in L/N/R sugar milk flavourings
- Growth in fortified launches
- Arla adds white milk to Protein range
- Animal welfare claims grow but remain niche
- Arla rebrands its organic milk as free-range
- M&S secures RSPCA Assured certification for its dairy farms
- Morrisons adds extra welfare requirements to Milk for Farmers
- Brands and retailers explore different packaging formats
- Müller reduces size of Frijj and introduces sharing format
- The Co-operative’s mini cartons target lunchbox occasions
- M&S adds clotted cream in single-serve pot
- Flavoured milk brands aim for a more adult audience
- Further growth in coffee-flavoured milks
- Milk with valerian claims to improve sleep
- Crossover brands enter the flavoured milk category
Advertising and Marketing Activity
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- Advertising spend falls in 2017
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- Figure 27: Total above-the-line, online display and direct mail advertising expenditure on milk, milk drinks and cream, 2014-17 (sorted by 2017)
- Arla continues to lead on advertising despite spending cutbacks
- Cravendale puts the focus on freshness in new TV advert
- YouTube adverts for organic milk highlight the cows’ idyllic life
- Social media campaign promotes different milk drinks for different coffee drinks
- Further sampling for Best of Both
- FrieslandCampina ups spending as it supports Yazoo
- Cinema advert for no-added-sugar variant focuses on permissibility
- New advert emphasises compliance with PHE calorie targets
- ‘Shake it up’ campaign urges people to be adventurous
- Targeting students with Freshers’ Week sampling
- Vegan body urges consumers to ‘Ditch Dairy’
- Dairy industry steps up activity
- Dairy UK and AHDB Dairy launch new generic marketing campaign
- Dairy Council promotes health benefits with nutritionist-backed Milk Manifesto
- Dairy farmers co-operate on ‘Februdairy’ social media campaign
- Nielsen Ad Intel coverage
The Consumer – What You Need to Know
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- 96% of UK adults use milk
- Most users would pay more than £1 for a four-pint bottle of milk
- Niche retail availability limits uptake of ethical milks
- Consumer interest in animal welfare does not always translate to buying
- Multiple barriers to drinking milk out of home
Usage of Milk, Dairy Drinks and Cream
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- 96% of UK adults use milk
- Need to persuade younger consumers of the merits of cow’s milk
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- Figure 28: Usage of milk, by type, February 2018
- Under-35s are key users of plant-based milks
- Most plant-based milk users also use cow’s milk
- Semi-skimmed remains the most widely used milk type
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- Figure 29: Usage of milk and milk drinks, by variety, February 2018
- Cream is used by half of UK adults
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- Figure 30: Usage of cream, by type, February 2018
How Much Consumers are Prepared to Pay for Milk
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- Most users would pay more than £1 for a four-pint bottle of milk
- A quarter of users would pay more than £1.40
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- Figure 31: How much consumers are prepared to pay for milk, February 2018
Awareness and Usage of Added-Value Milks
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- Retailers’ marketing push underpins reported usage of farmers’ fair pay milks…
- …but consumers’ high trust in supermarkets limits usage
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- Figure 32: Awareness and usage of added-value milks, by type, February 2018
- Reported usage of free-range milk contrasts niche retail availability
- Consumers’ trust in regulators both boosts and hinders reported usage
- Need to boost distribution and in-store visibility of ethical milks
Behaviours Relating to Milk, Dairy Drinks and Cream
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- Consumer interest in animal welfare does not always translate to buying
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- Figure 33: Behaviours relating to milk, dairy drinks and cream, February 2018
- Need for high-welfare dairy producers to emphasise this more strongly on-pack
- Perception of negative publicity adds further urgency
- Cream loses out as consumers embrace varied meals repertoires
- Social media can help to encourage cooking with cream
Attitudes towards Milk, Dairy Drinks and Cream
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- Multiple barriers to drinking white milk out of home
- In-store positioning should help to encourage impulse purchases
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- Figure 34: Attitudes towards milk, dairy drinks and cream, February 2018
- Importance of iodine is acknowledged by many
- References by glass would help to make milk’s role as source of iodine more tangible
- Iodine’s role in maintaining brain function should help to boost milk’s appeal
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 35: Best- and worst-case forecast of UK sales of milk, milk drinks and cream, by value, 2017-22
- Figure 36: Best- and worst-case forecast of UK sales of milk, milk drinks and cream, by volume, 2017-22
- Figure 37: Best- and worst-case forecast of UK sales of white milk, by value, 2017-22
- Figure 38: Best- and worst-case forecast of UK sales of white milk, by volume, 2017-22
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- Figure 39: Best- and worst-case forecast of UK sales of cream, by value, 2017-22
- Figure 40: Best- and worst-case forecast of UK sales of cream, by volume, 2017-22
- Figure 41: Best- and worst-case forecast of UK sales of flavoured milk, by value, 2017-22
- Figure 42: Best- and worst-case forecast of UK sales of flavoured milk, by volume, 2017-22
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- Figure 43: UK retail volume sales of milk, milk drinks and cream, 2012-22
- Figure 44: UK retail volume sales of white milk, 2012-22
- Figure 45: UK retail volume sales of cream, 2012-22
- Figure 46: UK retail volume sales of flavoured milk, 2012-22
- Forecast methodology
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