The Grocer’s 2017 Top Products Survey, THE definitive guide to the current state of the UK’s grocery industry

Given that yoghurt & potted dessert sales have dipped 0.4% (£8.9m) on volumes down 1.5% this past year, it might be a surprise that SKUs stocked in this sector are multiplying like bacterial cultures in an incubation tank.

“Overall shelf space has increased by 3% for yoghurt,” explains Nielsen analyst Rupert Austin. “The number of SKUs is increasing fastest for secondary and tertiary brands at 7%. Müller on-shelf growth is flat and Danone has lost 6.9% on last year. There’s a clear move by retailers to increase assortment away from just the core manufacturers.”

This is borne out by the numbers. All top seven brands are in decline, with their combined losses totalling an eyewatering £52.4m (6.2%). Greatest contributors to the decline are Müller Corner (down £23.9m), Activia (down £13.4m) and Petits Filous (down £9.9m). These losses reflect the ongoing shift in consumer expectations, says Austin.

“The trend of functionality and consumers expecting yoghurts to do more than simply taste great seems to be the next stage of development for the category following the impact that Greek and Big Pots have had on the category in preceding years,” he adds. “Function - be it low sugar, low fat, free from, health or protein - is having a considerable impact on the category.”

See Arla’s £10.7m (50.4%) growth, driven by its Protein and Skyr products, for proof. And Light & Free has delivered the greatest gain of the year, of £15.6m (nearly tripling its value), as brand owner Danone has sought to appeal to health-conscious consumers with a growing range of Greek style yoghurts.

“Health is multi-dimensional, and we are working to ensure that we cater to people’s diverse needs,” says Danone Dairies head of category strategy Clare Denham, pointing to August’s launch of Activia Grains & Seeds to tap demand for healthier breakfasts.

More proof of how health trends are impacting the category can be seen in dairy- free brand Alpro’s £8m growth over the past year, a surge of nearly a third. “Shoppers are recognising the benefits that plant-based products can bring to the table - and this is what’s setting Alpro apart in the yogurt aisle,” says Alpro head of marketing Vicky Upton.

The growth of such brands and The Collective, up £8.1m (40.7%), is pushing prices up, says Austin. “The Collective, Skyr, Alpro and others are gaining share and at a higher price point - highlighting premiumisation. Meanwhile, Müller and Danone have kept volumes sold on deal in line with the previous year, helping to keep prices down.”

However, Müller says deals are not as deep as they were previously as it seeks to “mitigate the impact of more costly ingredients”. With those pressures mounting, prices may be about to rise further.


Rachels lactose free yoghurt

Rachel’s Lactose Free by Lactalis Nestlé

The launch of a trio of lactose-free Rachel’s yoghurts during the autumn marked the brand’s first foray into the free-from segment. It also represented a bid by Rachel’s owner Lactalis Nestlé to broaden the appeal of “under-developed” lactose-free yoghurt to a wider audience. The product, available in natural, strawberry and peach flavours, is also the first British-made and organic lactose-free yoghurt, the brand says, and brings “a touch of luxury to this growing sector”.

The Grocer Top Products Survey 2017: Up!