Author: Mintel Group Ltd.
Last saved by: HTTP server

Dairy Drinks, Milk and Cream - UK - May 2011

INTRODUCTION
Definition
Abbreviations
EXECUTIVE SUMMARY
The market
Figure 1: Forecast of UK retail sales of liquid white & flavoured milk and cream, by value, 2005-15
Price wars in 2010 see milk market value dip
Cream benefits from rise in home cooking
Flavoured milk benefits from strong branded presence
Forecast
Market factors
Milk enjoys a healthy image
The fortunes of tea and cereals stand to reflect on milk
Concerns over long-term sustainability of milk prices
Companies, brands and innovation
Own-label dominates milk
Figure 2: Brand shares in the liquid white milk market, by value, 2009-10
Figure 3: Brand shares in the flavoured milk market, by value, 2010
Flavoured milk fuels innovation
Figure 4: New launches, by sub-category, milk, cream and substitutes, 2010
Ad spend is dominated by a handful of operators
The consumer
Milk usage is in decline, semi-skimmed gaining share
Figure 5: Average purchased quantities of liquid milk per person per week, millilitres, 1974-2009
Figure 6: Use of milk (excluding powdered and concentrated milk), Volume Importance Index, selected groups, 2010
The top use of milk is with hot drinks and cereals
Figure 7: Usage of milk by occasion, daily and at least once a week, March 2011
Milk enjoys strong health credentials, but remains off the radar for half of adults
Figure 8: Attitudes towards milk and cream, March 2011
Opportunities for new takes on flavoured milk and interest in farmers
Figure 9: Attitudes towards added value in milk, March 2011
What we think
ISSUES IN THE MARKET
How did the milk price war of 2010 affect the market?
What factors can manufacturers leverage to add value to milk?
To what extent will an aging population impact growth opportunities in the milk market?
How can flavoured milk broaden its appeal beyond kids?
FUTURE OPPORTUNITIES
 TREND: PROVE IT
 TREND: FAUXTHENTICITY
INTERNAL MARKET ENVIRONMENT
Key points
Milk enjoys a healthy image
Figure 10: Trends in agreement with selected lifestyle statements, 2006-10
Brands build awareness of allergies and intolerances
The dairy sector keeps working towards a greener image
Hot drinks and breakfast cereals play a role in milk demand
Slight decline in tea usage
Cereal and muesli consumption steady
Interest in cooking and convenience can support cream
Figure 11: Trends in attitudes towards cooking and convenience, 2006-10
BROADER MARKET ENVIRONMENT
Key points
Milk price debate continues
Figure 12: Number of farms in England, 1987-2009
Figure 13: Index of farmgate and retail price of milk, January 2008-March 2011
Cautious 2011 ahead
Figure 14: GfK NOP Consumer Confidence Index, Monthly January 2007-April 2011
Slow growth in the number of families offers little help for milk
Figure 15: Adult population, by lifestage, 2010
Figure 16: Forecast adult population trends, by lifestage, 2010-15
Growth in number of ABs is good news for cream
Figure 17: Forecast adult population trends, by socio-economic group, 2010-15
COMPETITIVE CONTEXT
Key point
Milk competes with yogurt and various drinks
Figure 18: UK retail value sales of selected markets competing with milk, at current prices, 2006-10
Yogurt has forged an image as providing calcium
Fruit smoothies lost momentum in recession
Milk has niche usage as a sports drink
Carbonates have performed well among soft drinks
STRENGTHS AND WEAKNESSES
Strengths
Weaknesses
WHO’S INNOVATING?
Key points
Flavoured milk fuels innovation
Figure 19: New launches, by sub-category, milk, cream and substitutes, 2008-10
Figure 20: New launches, by private label and brands, milk, cream and substitutes, 2008-10
Figure 21: New launches, by brand, milk, cream and substitutes, 2008-10
Vegetarian and low-fat claims most common
Flavoured milks drive low fat and no-nasties claims
Real innovation in greener packaging
Figure 22: New launches, top 12 claims, in milk, cream and substitutes, 2008-10
Themes in NPD
Flavoured milk sees segmentation in the UK
A broader range of flavours and health benefits feature internationally
New milk alternatives and cream flavours launched in UK in 2010
International development in light and flavoured creams
MARKET SIZE AND FORECAST
Key points
The overall market posted volume growth of 3% over 2005-10
Figure 23: UK retail sales of white & flavoured milk and cream, 2005-15
2010 saw milk come under pressure from price wars
Figure 24: Forecast of UK retail sales of white milk, by value and volume, 2005-15
Cream benefits from cooking but struggles with health image
Figure 25: Forecast of UK retail sales of cream, by value and volume, 2005-15
Flavoured milk posts faster growth from a smaller base
Figure 26: Forecast of UK retail sales of flavoured milk, by value and volume, 2005-15
Forecast
Milk, flavoured milk and cream market to reach £4.3 billion
Figure 27: Forecast of UK retail sales of white & flavoured milk and cream, by value, 2005-15
Value growth of 6.5% forecast for white milk by 2015
Figure 28: Forecast of UK retail sales of white milk, by volume, litres, 2005-15
Figure 29: Forecast of UK retail sales of white milk, by value, 2005-15
Value sales of cream forecast to grow by 24% by 2015
Figure 30: Forecast of UK retail sales of cream, by value, 2005-15
Strong growth forecast for flavoured milk
Figure 31: Forecast of UK retail sales of flavoured milk, by value, 2005-15
Forecast methodology
MARKET SEGMENTATION
Key points
Skimmed milk grows in a declining market
Figure 32: Retail sales of fresh and long-life white milk by type, value and volume, 2009-10
Added value segments perform best in milk
Figure 33: Retail sales of fresh white milk by type, by value, 2009-10
Figure 34: Retail sales of fresh milk by type, by volume, 2009-10
Cultured cream is top performer in 2010
Figure 35: UK retail sales of cream by type, by value, 2009-10
Figure 36: UK retail sales of cream by type, by volume, 2009-10
MARKET SHARE
Key points
Cravendale maintains its top position
Figure 37: Brand shares in the liquid white milk market, by value, 2009-10
Figure 38: Estimated manufacturer shares of own-label liquid milk sales, by volume, 2010
FRijj holds its lead in flavoured milk
Mixed fortunes for leading players
New entrants heat up the competition
Figure 39: Brand shares in the flavoured milk market, by value, 2009-10
COMPANIES AND PRODUCTS
Arla Foods
Dairy Crest
Robert Wiseman Dairies
FrieslandCampina
Alpro
Nestlé
St Helen’s Farm
Guernsey Dairy
BRAND COMMUNICATION AND PROMOTION
Key points
Ad spend rebounds in 2010
Figure 40: Topline advertising expenditure in the milk and cream market, 2006-10
TV captures two thirds of ad spend
Figure 41: Advertising expenditure in the milk and cream market, by media type, 2008-10
Arla accounts for nearly half of ad spend
Figure 42: Advertising expenditure in the milk and cream market, by top 10 companies, 2008-10
Figure 43: Advertising expenditure in the milk and cream market, by top 12 brands, 2008-10
Leading brands look for mainstream appeal
“Make Mine Milk” looks to engage the 15-24-year-olds
CONSUMER – TRENDS IN USAGE OF MILK
Key points
Milk consumption is in slow decline
Figure 44: Average purchased quantities of liquid milk per person per week, millilitres, 1974-2009
Figure 45: Trends in frequency of use of milk (excluding powdered and concentrated milk), 2009-10
The shift towards semi-skimmed milk slows in 2010
Figure 46: Trends in kinds of milk (excluding powdered and concentrated milk) used most often, 2008-10
Families are key users of milk
Figure 47: Use of milk (excluding powdered and concentrated milk), Volume Importance Index, selected groups, 2010
CONSUMER – USAGE OF MILK AND CREAM BY TYPE AND OCCASION
Key points
Semi-skimmed milk rules
Figure 48: Usage of milk in the household, by type, March 2011
Three in four use semi-skimmed milk
Alternatives enjoy minority appeal
Flavoured milk is used by one in five households
… and by half of 7-19-year-olds
Figure 49: Trends in frequency of drinking flavoured milk drinks, 2006-10
Figure 50: Drinking flavoured milk drinks by demographics, 2010
Three in four have used cream
Figure 51: Usage/serving of cream in the last six months, by selected demographics, March 2011
Figure 52: Repertoire of cream usage, by type, March 2011
Double cream is the most popular type
Figure 53: Cream used or served in the last six months, by type, March 2011
Milk’s top use is in tea or coffee
Figure 54: Usage of milk, by occasion, daily and at least once a week, March 2011
Figure 55: Overall usage of milk, by occasion, March 2011
Cream is most popular as a topping
Figure 56: Usage of cream by occasion, by frequency, March 2011
CONSUMER – ATTITUDES TOWARDS MILK AND CREAM
Key points
Milk enjoys strong health credentials, but remains off the radar for half of adults
Figure 57: Attitudes towards milk and cream, March 2011
Milk enjoys strong health credentials
... but half of adults don’t think about it
Cream suffers from a high-fat image
One in five are swayed by milk prices
CONSUMER – ATTITUDES TOWARDS ADDED VALUE IN MILK
Key points
Locally sourced milk of interest for half the nation
Figure 58: Attitudes towards added value in milk, March 2011
Flavoured milk is seen as a way to win over the kids
A large minority question its health credentials
Strong interest in milk with fruit and berries
High minority interest in added health benefits
Niche demand for “grown-up” flavours
Local sourcing chimes with half the nation
Strong interest in supporting farmers
Limited concern for animal welfare and environment
TARGET GROUPS
Key points
 FOUR TARGET GROUPS
Figure 59: Target groups for milk and cream, March 2011
Milk-lovers (33%)
Dairy-awares (20%)
Should-dos (31%)
Apathetics (17%)
APPENDIX – INTERNAL MARKET ENVIRONMENT
Figure 60: Trends in agreement with selected lifestyle statements, 2006-10
Figure 61: Agreement with selected lifestyle statements, by demographics, 2010
APPENDIX – MARKET SIZE AND FORECAST
Figure 62: Forecast of UK retail sales of white & flavoured milk and cream, by volume litres, 2005-15
Figure 63: Forecast of UK retail sales of white milk, flavoured milk and cream, best and worst case forecast, by volume, litres, 2010-15
Figure 64: Forecast of UK retail sales of white milk, flavoured milk and cream, best and worst case forecast, by value, 2010-15
White milk
Figure 65: Forecast of UK retail sales of white milk, best and worst case forecast, by volume, litres, 2010-15
Figure 66: Forecast of UK retail sales of white milk, best and worst case forecast, by value, 2010-15
Cream
Figure 67: Forecast of UK retail sales of cream, by volume, litres, 2005-15
Figure 68: Forecast of UK retail sales of cream, best and worst case forecast, by volume, litres, 2010-15
Figure 69: Forecast of UK retail sales of cream, best and worst case forecast, by value, 2010-15
Flavoured milk
Figure 70: Forecast of UK retail sales of flavoured milk, by volume, litres, 2005-15
Figure 71: Forecast of UK retail sales of flavoured milk, best and worst case forecast, by volume, litres, 2010-15
Figure 72: Forecast of UK retail sales of flavoured milk, best and worst case forecast, by value, 2010-15
APPENDIX – CONSUMER – TRENDS IN USAGE OF MILK
Figure 73: Trends in frequency of use of milk (excluding powdered and concentrated milk), 2009-10
Figure 74: Frequency of use of milk (excluding powdered and concentrated milk), by demographics, 2010
Figure 75: Trends in types of milk (excluding powdered and concentrated milk) used most often, 2008-10
Figure 76: Trends in kinds of milk (excluding powdered and concentrated milk) used most often, 2008-10
Figure 77: Trends in consumption of flavoured milk drinks, 2005-09
Figure 78: Consumption of flavoured milk drinks, by demographics, 2009
APPENDIX – CONSUMER – USAGE OF MILK AND CREAM BY TYPE AND OCCASION
Figure 79: Types of milk used, March 2011
Figure 80: Most popular types of milk used, by demographics, March 2011
Figure 81: Next most popular types of milk used, by demographics, March 2011
Figure 82: Other types of milk used, by demographics, March 2011
Figure 83: Most popular types of milk used for personal drink/use, by demographics, March 2011
Figure 84: Next most popular types of milk used for personal drink/use, by demographics, March 2011
Figure 85: Other types of milk used for personal drink/use, by demographics, March 2011
Figure 86: Usage of cream by type, in the past six months, March 2011
Figure 87: Most popular types of cream used in the last six months, by demographics, March 2011
Figure 88: Next most popular types of cream used in the last six months, by demographics, March 2011
Figure 90: Repertoire of usage of cream by type, by demographics, March 2011
Figure 91: Ways of personally using milk, by frequency, March 2011
Figure 92: Personal use of milk in tea or coffee, and cold with cereal/muesli, by demographics, March 2011
Figure 93: Personal use of milk in other hot drinks and on its own as a cold drink, by demographics, March 2011
Figure 94: Personal use of milk in making porridge and hot with cereal/muesli, by demographics, March 2011
Figure 95: Personal use of milk as an ingredient in another cold drink and on its own as a hot drink, by demographics, March 2011
Figure 96: Personal use of milk for cooking and as a drink on its own during/after exercise, by demographics, March 2011
Figure 97: Personal use of milk with flavourings added self, as a drink, by demographics, March 2011
Figure 98: Personal use of cream in cooking, and in baking, by demographics, March 2011
Figure 99: Personal use of cream as a topping on desserts, and in hot drinks, by demographics, March 2011
Figure 101: Repertoire of occasions milk is personally used for, overall usage, by demographics, March 2011
Figure 102: Repertoire of occasions cream is used for, March 2011
Figure 103: Repertoire of occasions cream is used for, by demographics, March 2011
APPENDIX – CONSUMER – ATTITUDES TOWARDS MILK AND CREAM
Figure 104: Attitudes towards milk and cream, March 2011
Figure 105: Agreement with statements ‘Milk is a good source of nutrients’ and ‘I prefer yogurt to milk because it has pre- and probiotics’, by demographics, March 2011
Figure 106: Agreement with statements ‘I try to consume three portions of dairy products a day’ and ‘I should drink more milk’, by demographics, March 2011
Figure 107: Agreement with statements ‘I don’t think of milk when choosing something to drink’ and ‘I rarely use cream because it’s so high in fat’, by demographics, March 2011
Figure 108: Agreement with statements ‘Milk is a healthier drink than water’ and ‘I use cream more than I did a year ago because I’m cooking at home more’, by demographics, March 2011
Figure 109: Agreement with statements ‘The price of milk affects where I do my grocery shopping’ and ‘I would use cream more if it lasted longer before going off’, by demographics, March 2011
Figure 110: Agreement with statements ‘Milk is healthier than fizzy drinks’  by demographics, March 2011
APPENDIX – CONSUMER – ATTITUDES TOWARDS ADDED VALUE IN MILK
Figure 111: Attitudes towards added value in milk, March 2011
Figure 112: Agreement with statements ‘Flavoured milk is less healthy than unflavoured’ and ‘Flavoured milk is a good way to get kids to drink milk’, by demographics, March 2011
Figure 113: Agreement with statements ‘I would be interested in milk flavoured using fresh fruit and berries’ and ‘I would be interested in milk with flavours more appealing to adults’, by demographics, March 2011
Figure 114: Agreement with statements ‘I would be interested in milk with added health benefits’ and ‘Filtered milk doesn’t go off as quickly as standard milk’, by demographics, March 2011
Figure 115: Agreement with statements ‘I would like to see more locally sourced milk/cream at my supermarket’ and ‘I would pay more for milk which guarantees higher animal welfare’, by demographics, March 2011
Figure 116: Agreement with statements ‘I would pay more for milk if the extra money went to the farmers’ and ‘I pay attention to environmental considerations (eg packaging, carbon footprint) when buying milk’, by demographics, March 2011
Figure 117: Agreement with statements ‘Organic milk is worth paying more for’, by demographics, March 2011
APPENDIX – TARGET GROUPS
Figure 118: Statements on eating habits, by target groups, March 2011
Figure 119: Statements on cooking style, by target groups, March 2011
Figure 120: Attitudes towards milk and cream, by target groups, March 2011
Figure 121: Attitudes towards added value in milk, by target groups, March 2011
Figure 122: Target groups, by demographics, March 2011

This report is supplied in accordance with Mintel's terms and conditions.  
© Mintel Group Ltd.