Milk has broken out of the serried ranks of semi-skimmed into premium and added-value dairy drinks – with great effect
These are good times for dairy drinks manufacturers, with consumers increasingly looking beyond basic milk options for added value and brands.
A flurry of NPD has helped boost interest in a category that is dominated by the 4-pint of semi-skimmed milk, says Neil Franklin, Tesco’s category manager for milk and cream. “We are starting to see people trying to consume a bit more milk, he says. “Within the category there’s been the evolution of filtered milk, there’s vast opportunity to expand the flavoured milk sector, and yoghurt drinks is another area where penetration is still growing.”
In the fresh milk category, overall volumes are down, but it’s been a strong year for Robert Wiseman, which has significantly increased volumes on the back of a series of middle-ground contract wins with The Co-operative Group, Blakemore and Capper. Its £130.2m Black & White brand has also been the beneficiary of the collapse of rival convenience sector supplier Dairy Farmers of Britain, which has helped it to impressive 42.4% growth.
“The convenience sector is growing and Robert Wiseman Dairies is working extremely hard to provide a product with real shelf presence and brand loyalty,” says communications director Graeme Jack.
Wiseman has closed the gap on market leader Cravendale, although the Arla-produced brand continues to show strong 18.2% growth to take its sales to £146.5m. “We are overwhelmed by the success of the brand, especially in the current commodity market,” says Cravendale brand manager Jessica Hardcastle. Cravendale has launched three further creatives into its cow, pirate, cyclist ad series this year, which Hardcastle says have helped the brand to 6% volume growth, bucking the 1.8% volume decline in milk generally.
The purity of Cravendale will remain the focus of a new TV ad in early 2010, but Arla will also be doing more to emphasise the brand’s longer-life credentials and stressing the fact that it means lower wastage. C-store favourite Watson Dairy has also had a good year, with sales growth well above the category at 18.1%.
The flavoured milk category continues to grow on the back of a raft of NPD bringing in new consumers. Up 6.2% in value and 9.8% in volume, the sector is seen as one of the most up-and-coming in dairy, and could emulate the previously stunning growth of smoothies, believes Hamish Renton, marketing director at Mars, Galaxy and Moo supplier Milk Link.
“There’s a similar adoption curve to smoothies,” he says. “We’ve improved the offer and we’re adding value.”
Renton also praised Frijj, which continues to edge out Yazoo at the top of the category, with 16.4% growth extending its lead over the Dutch-owned rival to £4.5m. Limited-edition Frijj flavours such as vanilla, cookie dough and chocolate fudge brownie have added interest to the category, says Dairy Crest’s liquids sales and marketing director Marc Dubery. The company has also invested significant sums in above-the-line activity and kicked off a season-long sponsorship of blokey Sky Sports show Soccer AM in August.
Also doing well is Dunn’s River’s vitamin and mineral-enriched Nurishment drink, which has shot up 15.5% to £6.7m, helped by the addition of Nurishment Extra in bottles rather than cans.
The yoghurt drinks market reversed a 2.6% sales fall last year to return back to 2007 levels, though that was largely on the back of a strong performance from the big two brands, Danone’s Actimel and McNeil Nutritionals’ Benecol.
Actimel continues to dominate the category, with its widespread appeal helping it to 5.5% value growth to £114.1m.
Benecol was the category’s star performer this year, with sales soaring 18.8% to £39.2m, a rise attributed by marketing manager Esther van Onselen to the brand’s repositioning as an everyday product. “The growth is predominantly coming from people using Benecol more,” she explains. “There’s a massive opportunity out there to make every day a Benecol day.”
The brand received a further boost from new EU legislation allowing it to flag up its key plant stanol ester ingredients as being beneficial to heart health.
The dairy industry has had a turbulent year and is conscious there may be challenging times ahead. But with the Milk Marketing Forum orchestrating a £7.5m Make Mine Milk generic campaign for milk, which will kick off in 2010 for three years, the category can look forward to further strong sales.
Top launch: Galaxy Shots, Mars
Mars made a notable bid to muscle in on the probiotic market dominated by Danone and Benecol in September by launching Galaxy Shots. With many rival products in the sector offering yoghurt and fruit-flavoured drinks, it is hoping to make its mark by tempting consumers with chocolate in a low-calorie, functional form. The company is hoping sales of Galaxy Shots will exceed £22m a year.
Top Products Survey 2009