UK MD Ken Wood said he was increasingly concerned about aggressive pricing in the short life dairy products sector.
“In 2003 we saw too much promotion,” said Wood, “and that drives value out of the market.”
Last year, two of the biggest dairy players arrived in the SLDP category, said Wood. Nestlé
bought Ski and Danone purchased Shape and they then led the aggressive pricing.
However, Müller’s annual SLDP market report showed that deep-cut promotions and aggressive trading failed to spur impressive value growth for either Danone or Nestlé as the two companies posted modest sales rises of 2.2% and 3.3% respectively - below overall market growth of 7.4%. “Bogofs and other price promotions don’t add huge value, but innovation and advertising support do,” added Wood.
The report showed a vibrant £1.55bn category. Yogurt rose by 3.6% to £790.7m, with Müller consolidating its 40% share, chilled desserts rose by 6% to £459.5m, fromage frais was up by 7.8% to £178.3m, while yogurt drinks rose by 49% to £121.8m.
Müller’s three new Müller Corner varieties, in partnership with McVitie’s, are on shelf from next week.
Jaffa Cakes, Penguin and Milk Chocolate Digestive come in 150g pots and their launch will be supported by a heavyweight advertising campaign as well as trade promotions.