This article is part of our digital feature on dairy.
Big pot natural yoghurt is the fastest growing dairy sector of the past year, according to exclusive research for The Grocer.
Sales have surged 12.4% to £176.8m on volumes up 11.4%, defying a 1.7% volume decline in the overall yoghurts market, up just 0.1% in value [Kantar Worldpanel 52 w/e 29 March 2015].
The growth, worth £19.5m to retailers, means natural yoghurt is now worth more than luxury varieties, which have suffered a 5.7% decline to £161.2m, on volumes down 9.3%.
Only dairy-free yoghurts have turned in a higher rate of growth than natural in percentage terms, up 15.1% to £31m on volumes up 15.5%.
“Increasingly, consumers are concerned with healthy diets and reducing additives,” explains Azhar Zouq, MD of Lancashire Farm Dairies. “We’ve seen our own sales of big pot natural yoghurt go from strength-to-strength as consumers start to see more to the category than snack products.”
Zouq believes the growing popularity of using yoghurt as an all-day ingredient – from breakfast to savoury recipes – is a key driver of growth now and in the future.
This is something The Collective has tapped into with the June 2014 launch of Straight Up, live yoghurt with no added sugar or sweeteners, marketed for use in savoury dishes and home baking.
“Natural yoghurt consumption in the UK is still well behind the continent, so the market still has legs,” says Mike Hodgson, co-founder of The Collective. “People’s desire for natural foods and tasty food is brilliant for natural yoghurt. I can see it being worth around £500m in 10 years’ time.”
While he expects the bulk of this to come from volume increase, premiumisation also has a part to play. Prices are increasing for plain big pots but at an average of £1.96 per kilo they remain a below the market average price of £2.58.
“In natural yoghurt there is an appetite for premium products and brands have an important part to play in that,” Hodgson adds. “Straight Up retails for £2 in most places which is a fair premium but in natural yoghurt consumers are prepared to be discerning and they want to buy the good stuff and we provide that.”
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Big pot natural yoghurt flies high with £19m growth