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Dairy Drinks, Milk and Cream - UK - April 2014

“Reflecting the established role of milk as a household staple, volume sales have posted modest growth. Milk is not a go-to drink as a drink on its own, however a tailored breakfast or exercise proposition can offer a growth avenue for brands, and a justification for a price premium in the midst of the price pressures faced by the market.”

– Kiti Soininen, Head of UK Food, Drink & Foodservice Research

Some questions answered in this report include:

  • Can milk price wars damage a retailers’ image?
  • Is it time for a grown-up sales pitch for flavoured milk?
  • Can protein help milk tap into breakfast and exercise?

Prospects seem brighter for the dairy drinks, milk and cream market than at any time since 2009, with the market in 2013 posting volume and value growth for the first time since then.

Most of the value growth was attributable to the dominant white milk segment, with sales up in 2013 partly as a result of improved farmgate prices during 2013 following farmers’ protests the previous year. Flavoured milk propped up growth with sales up year on year as new brands and products came to market. Modest volume growth is expected going forward, though supported by the growth in the number of children aged 5-14. Meanwhile the improved economic outlook should offer some scope for price rises, with value sales forecast to stand at £4.7 billion in 2018.

This report examines the UK retail market for milk and cream, including products sold via doorstep delivery as well as through retail outlets. Sales of milk within the catering and industrial sectors, as well as welfare milk supplies, unless otherwise stated, are excluded.

The market for baby milk, both liquid and powder, falls outside the scope of this report and will be covered in Mintel’s Baby Food and Drink – UK, April 2014 report.

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Table of contents

  1. Introduction

      • Definition
        • Abbreviations
        • Executive Summary

            • The market
              • Forecast
                • Figure 1: UK retail sales of dairy drinks, milk and cream, by value, 2008-18
              • Market factors
                • Companies and brands
                  • Market share – White milk
                    • Figure 2: Estimated brand shares in the white milk market, by value and volume, 2013*
                  • Market share – Cream
                    • Figure 3: Estimated brand shares in the UK cream market, by value and volume, 2013*
                  • Market share – Flavoured milk
                    • Figure 4: Estimated brand shares in the UK flavoured milk market, by value and volume, 2013*
                  • Adspend
                    • Who’s innovating
                      • The consumer
                        • Milk is used universally
                          • Figure 5: Types of milk and milk drinks used personally in the last three months, January 2014
                        • Three in four adults use cream
                          • Figure 6: Cream usage in the last three months, January 2014
                        • Only two in five adults trust the dairy industry to purify milk
                          • Figure 7: Attitudes towards milk and cream, January 2014
                          • Figure 8: Attitudes towards milk and flavoured milk, January 2014
                        • What we think
                        • Insights and Issues

                            • Milk price wars can damage retailers’ image
                              • The facts
                                • The implications
                                  • Time for a grown-up sales pitch for flavoured milk
                                    • The facts
                                      • The implications
                                        • Protein can help milk tap into breakfast and exercise
                                          • The facts
                                            • The implications
                                            • Trend Application

                                                • Trend: Never Say Die
                                                  • Trend: Sense of the Intense
                                                    • Mintel Futures: Human
                                                    • Market Drivers

                                                      • Key points
                                                        • Pricing and supply
                                                          • Supply chain continues to consolidate
                                                            • Farmgate milk prices show strong growth
                                                              • Figure 9: Farmgate price index – Monthly milk prices, 2008-13
                                                            • Tesco unleashes price war as other grocers follow suit
                                                              • Badger cull rollout abandoned
                                                                • Predicted growth in children aged 5-14 is good news for the market
                                                                  • Figure 10: Projected trends in population growth, by age, 2013-18
                                                                • Consumer confidence recovering
                                                                  • Figure 11: Monthly consumer confidence index, January 2008-March 2014
                                                              • Who’s Innovating?

                                                                • Key points
                                                                  • NPD growth in 2013 centres on soya drinks and flavoured milk
                                                                    • Figure 12: New product launches within the UK dairy drinks, milk and cream market, by sub-category, 2010-13
                                                                  • Innovation swings from own-label to brands
                                                                    • Figure 13: New product launches within the UK dairy drinks, milk and cream market, by company (top 10), 2010-13
                                                                  • Environmentally friendly claims grow but remain in demand
                                                                    • Figure 14: New product launches within the UK dairy drinks, milk and cream market, by claims (top 10), 2010-13
                                                                  • Cow’s milk alternatives look to health claims to drive demand
                                                                    • Flavoured milk seeks to boost appeal among older adults
                                                                      • FRijj rebrands premium range as FRijj Supreme…
                                                                        • …and introduces more coffee flavours
                                                                          • Upping the indulgence stakes
                                                                            • Operators look to provide breakfast in a drink
                                                                              • Sneakz Organic sneaks veggies into milkshakes
                                                                                • Jelly Belly and Hello Kitty move into flavoured milk
                                                                                • Strengths and Weaknesses

                                                                                  • Strengths
                                                                                    • Weaknesses
                                                                                    • Market Size and Forecast

                                                                                      • Key points
                                                                                        • White milk helps market return to value growth in 2013
                                                                                          • Easing of price pressures sees value growth in white milk
                                                                                            • Cream volumes continue to fall
                                                                                              • Flavoured milk goes from strength to strength
                                                                                                • Figure 15: UK retail sales of dairy drinks, milk and cream, by value, by main segment, 2008-18
                                                                                                • Figure 16: UK retail sales of dairy drinks, milk and cream, by volume, by main segment, 2008-18
                                                                                              • Modest growth expected for the overall market
                                                                                                • Figure 17: UK retail sales and forecast of dairy drinks, milk and cream, by volume, 2008-18
                                                                                                • Figure 18: UK retail sales and forecast of dairy drinks, milk and cream, by value, 2008-18
                                                                                              • Forecast methodology
                                                                                              • Market Segmentation

                                                                                                • Key points
                                                                                                  • Growth in both value and volume of white milk
                                                                                                    • Semi-skimmed milk retains its dominance
                                                                                                      • Figure 19: Retail sales of white milk (fresh and long-life), by type, by value and volume, 2011-13
                                                                                                    • Standard fresh milk still makes up more than 80p of every £1 spent
                                                                                                      • Figure 20: Retail sales of fresh white milk, by type, by value, 2011-13
                                                                                                      • Figure 21: Retail sales of fresh white milk, by type, by volume, 2011-13
                                                                                                    • Fresh cream remains dominant segment
                                                                                                      • Figure 22: Retail sales of cream, by type, by value, 2011-13
                                                                                                      • Figure 23: Retail sales of cream, by type, by volume, 2011-13
                                                                                                  • Market Share

                                                                                                    • Key points
                                                                                                      • Own-label dominates in white milk
                                                                                                        • Figure 24: Brand shares in the white milk market, by value and volume, 2013*
                                                                                                        • Figure 25: Leading brands in the white milk market, value sales, 2012 and 2013
                                                                                                        • Figure 26: Leading brands in the white milk market, volume sales, 2012 and 2013
                                                                                                      • Elmlea edges further ahead
                                                                                                        • Figure 27: Estimated brand shares in the UK cream market, by value and volume, 2013*
                                                                                                        • Figure 28: Leading brands’ sales in the UK cream market, by value, 2012 and 2013
                                                                                                        • Figure 29: Leading brands’ sales in the UK cream market, by volume, 2012 and 2013
                                                                                                      • Leaders lose share in flavoured milk to new entrants
                                                                                                        • Figure 30: Estimated brand shares in the UK flavoured milk market, by value and volume, 2013*
                                                                                                        • Figure 31: Leading brands’ sales in the UK flavoured milk market, by value and volume, 2012 and 2013
                                                                                                        • Figure 32: Leading brands’ sales in the UK flavoured milk market, by volume, 2012 and 2013
                                                                                                    • Companies and Products

                                                                                                      • Alpro
                                                                                                        • Background
                                                                                                          • Recent activity
                                                                                                            • Product range and innovation
                                                                                                              • Marketing and promotion
                                                                                                                • Arla Foods
                                                                                                                  • Background
                                                                                                                    • Recent activity
                                                                                                                      • Product range
                                                                                                                        • Product innovation
                                                                                                                          • Marketing and promotion
                                                                                                                            • Dairy Crest
                                                                                                                              • Background
                                                                                                                                • Recent activity
                                                                                                                                  • Product range
                                                                                                                                    • Product innovation
                                                                                                                                      • Marketing and promotion
                                                                                                                                        • FrieslandCampina
                                                                                                                                          • Background
                                                                                                                                            • Product range and innovation
                                                                                                                                              • Marketing and promotion
                                                                                                                                                • Müller Wiseman Dairies
                                                                                                                                                  • Background
                                                                                                                                                    • Recent activity
                                                                                                                                                      • Product range and innovation
                                                                                                                                                        • Marketing and promotion
                                                                                                                                                          • Nestlé UK Ltd.
                                                                                                                                                            • Background
                                                                                                                                                              • Product range and innovation
                                                                                                                                                                • Marketing and promotion
                                                                                                                                                                • Brand Communication and Promotion

                                                                                                                                                                  • Key points
                                                                                                                                                                    • Arla Foods continues to dominate adspend
                                                                                                                                                                      • Figure 33: Top 10 advertisers in the dairy drinks, milk and cream market, 2010-13
                                                                                                                                                                    • Arla’s Cravendale ditches cats in favour of Barry the Biscuit Boy
                                                                                                                                                                      • Almond milk gets the ad spotlight
                                                                                                                                                                        • Dairy Council turns to hip-hop to Milk it in Chelsea
                                                                                                                                                                        • Consumer – Usage of Milk, Milk Drinks and Cream

                                                                                                                                                                          • Key points
                                                                                                                                                                            • Milk and milk drink usage
                                                                                                                                                                                • Figure 34: Types of milk and milk drinks used personally in the last three months, January 2014
                                                                                                                                                                                • Figure 35: Quantity of milk and milk drinks used personally in a typical week, January 2014
                                                                                                                                                                              • Milk remains a diet staple
                                                                                                                                                                                • Semi-skimmed milk retains its near universal usage
                                                                                                                                                                                  • Presence of children affects adults’ milk usage
                                                                                                                                                                                    • Plant-based milk usage is still low
                                                                                                                                                                                      • Cream usage
                                                                                                                                                                                        • Figure 36: Cream usage in the last three months, January 2014
                                                                                                                                                                                      • Double cream remains the most used type
                                                                                                                                                                                        • Cream can take cues from yellow fats to build associations with cooking
                                                                                                                                                                                        • Consumer – Attitudes Towards Milk and Cream

                                                                                                                                                                                          • Key points
                                                                                                                                                                                            • Attitudes towards milk and cream
                                                                                                                                                                                              • Figure 37: Attitudes towards milk and cream, January 2014
                                                                                                                                                                                            • Consumers have little trust in the industry…
                                                                                                                                                                                              • …with supermarkets also facing doubts
                                                                                                                                                                                                • Strong demand for ‘grown-up’ products in flavoured milk
                                                                                                                                                                                                  • Milk can appeal as a sports drink
                                                                                                                                                                                                    • Low-fat cream could benefit from greater visibility
                                                                                                                                                                                                    • Consumer – Attitudes Towards Milk and Flavoured Milk

                                                                                                                                                                                                      • Key points
                                                                                                                                                                                                        • Attitudes towards milk and flavoured milk
                                                                                                                                                                                                          • Figure 38: Attitudes towards milk and flavoured milk, January 2014
                                                                                                                                                                                                        • Support for farmers and transparency are in high demand
                                                                                                                                                                                                          • A place for fair trade milk?
                                                                                                                                                                                                            • Three in five look for origin information
                                                                                                                                                                                                              • Tapping into the breakfast occasion
                                                                                                                                                                                                                • Smaller packs and sweeteners appeal in flavoured milk
                                                                                                                                                                                                                • Appendix – Market Size and Forecast

                                                                                                                                                                                                                    • Figure 39: UK retail sales of dairy drinks, milk and cream, by value and volume, 2008-18
                                                                                                                                                                                                                  • White milk
                                                                                                                                                                                                                    • Figure 40: UK retail sales of white milk (fresh and long-life), by value and volume, 2008-18
                                                                                                                                                                                                                    • Figure 41: UK retail sales and forecast of white milk, by value, 2008-18
                                                                                                                                                                                                                    • Figure 42: UK retail sales and forecast of white milk, by volume, 2008-18
                                                                                                                                                                                                                  • Cream
                                                                                                                                                                                                                    • Figure 43: UK retail sales of cream, by value and volume, 2008-18
                                                                                                                                                                                                                    • Figure 44: UK retail sales and forecast of dairy drinks, milk and cream, by volume, 2008-18
                                                                                                                                                                                                                  • Flavoured milk
                                                                                                                                                                                                                    • Figure 45: UK retail sales of flavoured milk, by value and volume, 2008-18
                                                                                                                                                                                                                    • Figure 46: UK retail sales and forecast of flavoured milk, by value, 2008-18
                                                                                                                                                                                                                    • Figure 47: UK retail sales and forecast of flavoured milk, by volume, 2008-18
                                                                                                                                                                                                                    • Figure 48: Retail sales of flavoured milk, by type, by value, 2011-13
                                                                                                                                                                                                                    • Figure 49: Retail sales of flavoured milk, by type, by volume, 2011-13
                                                                                                                                                                                                                • Appendix – Brand Communication and Promotion

                                                                                                                                                                                                                    • Figure 50: Adspend in the dairy drinks, milk and cream market, by media, 2010-13
                                                                                                                                                                                                                • Appendix – The Consumer – Usage of Milk and Milk Drinks

                                                                                                                                                                                                                    • Figure 51: Types of milk and milk drinks used personally, January 2014
                                                                                                                                                                                                                    • Figure 52: Most popular types of milk and milk drinks used personally, by demographics, January 2014
                                                                                                                                                                                                                    • Figure 53: Next most popular types of milk and milk drinks used personally, by demographics, January 2014
                                                                                                                                                                                                                    • Figure 54: Other types of milk and milk drinks used personally, by demographics, January 2014
                                                                                                                                                                                                                    • Figure 55: Repertoire of types of milk and milk drinks used personally, January 2014
                                                                                                                                                                                                                    • Figure 56: Repertoire of types of milk and milk drinks used personally, by demographics, January 2014
                                                                                                                                                                                                                    • Figure 57: Types of milk and milk drinks used personally, by repertoire of types of milk and milk drinks used personally, January 2014
                                                                                                                                                                                                                    • Figure 58: Most popular types of milk and milk drinks used by other members, by demographics, January 2014
                                                                                                                                                                                                                    • Figure 59: Next most popular types of milk and milk drinks used by other members, by demographics, January 2014
                                                                                                                                                                                                                    • Figure 60: Other types of milk and milk drinks used by other members, by demographics, January 2014
                                                                                                                                                                                                                    • Figure 61: Repertoire of types of milk and milk drinks used by other members, by demographics, January 2014
                                                                                                                                                                                                                • Appendix – The Consumer – Usage of Milk by Volume

                                                                                                                                                                                                                    • Figure 62: Milk usage, by volume, January 2014
                                                                                                                                                                                                                    • Figure 63: Milk usage, by volume, by demographics, January 2014
                                                                                                                                                                                                                • Appendix – The Consumer – Usage of Cream

                                                                                                                                                                                                                    • Figure 64: Cream usage in the last three months, January 2014
                                                                                                                                                                                                                    • Figure 65: Most popular cream usage in the last three months, by demographics, January 2014
                                                                                                                                                                                                                    • Figure 66: Next most popular cream usage in the last three months, by demographics, January 2014
                                                                                                                                                                                                                    • Figure 67: Other cream usage in the last three months, by demographics, January 2014
                                                                                                                                                                                                                    • Figure 68: Repertoire of usage of cream, January 2014
                                                                                                                                                                                                                    • Figure 69: Repertoire of usage of cream, by demographics, January 2014
                                                                                                                                                                                                                    • Figure 70: Cream usage in the last three months, by repertoire of usage of cream, January 2014
                                                                                                                                                                                                                • Appendix – The Consumer – Attitudes Towards Milk and Cream

                                                                                                                                                                                                                    • Figure 71: Attitudes towards milk and cream, January 2014
                                                                                                                                                                                                                    • Figure 72: Most popular attitudes towards milk and cream, by demographics, January 2014
                                                                                                                                                                                                                    • Figure 73: Next most popular attitudes towards milk and cream, by demographics, January 2014
                                                                                                                                                                                                                    • Figure 74: Attitudes towards milk and cream, by most popular types of milk and milk drinks used personally, January 2014
                                                                                                                                                                                                                    • Figure 75: Attitudes towards milk and cream, by next most popular types of milk and milk drinks used personally, January 2014
                                                                                                                                                                                                                    • Figure 76: Attitudes towards milk and cream, by other types of milk and milk drinks used personally, January 2014
                                                                                                                                                                                                                    • Figure 77: Attitudes towards milk and cream, by most popular types of cream used in the last three months, January 2014
                                                                                                                                                                                                                    • Figure 78: Attitudes towards milk and cream, by next most popular types of cream used in the last three months, January 2014
                                                                                                                                                                                                                • Appendix – The Consumer – Attitudes Towards Milk and Flavoured Milk

                                                                                                                                                                                                                    • Figure 79: Attitudes towards milk and flavoured milk, January 2014
                                                                                                                                                                                                                    • Figure 80: Agreement with the statement ‘More profit from sales of milk should go directly to the farmer’, by demographics, January 2014
                                                                                                                                                                                                                    • Figure 81: Agreement with the statement ‘I think of milk as a good source of protein’, by demographics, January 2014
                                                                                                                                                                                                                    • Figure 82: Agreement with the statement ‘Milk packaging should have more information about where the milk came from’, by demographics, January 2014
                                                                                                                                                                                                                    • Figure 83: Agreement with the statement ‘Milk sold in plastic packaging should be more environmentally friendly’, by demographics, January 2014
                                                                                                                                                                                                                    • Figure 84: Agreement with the statement ‘Dairy-based drinks with added protein or oats make a good breakfast’, by demographics, January 2014
                                                                                                                                                                                                                    • Figure 85: Agreement with the statement ‘More flavoured milk should contain natural sweeteners as opposed to sugar’, by demographics, January 2014
                                                                                                                                                                                                                    • Figure 86: Agreement with the statement ‘Dairy-based protein drinks are healthier than energy drinks’, by demographics, January 2014
                                                                                                                                                                                                                    • Figure 87: Agreement with the statement ‘Drinking hot milk helps make for a good night’s sleep’, by demographics, January 2014
                                                                                                                                                                                                                    • Figure 88: Agreement with the statement ‘I’d be keen to try milk designed especially for certain types of coffee’, by demographics, January 2014
                                                                                                                                                                                                                    • Figure 89: Agreement with the statement ‘There’s a lack of flavoured milk in small serving bottles/cartons’, by demographics, January 2014
                                                                                                                                                                                                                    • Figure 90: Agreement with the statement ‘Plant-based milk is healthier for you than cow’s milk’, by demographics, January 2014
                                                                                                                                                                                                                    • Figure 91: Attitudes towards milk (including flavoured milk), by most popular types of milk and milk drinks used personally, January 2014
                                                                                                                                                                                                                    • Figure 92: Attitudes towards milk (including flavoured milk), by next most popular types of milk and milk drinks used personally, January 2014
                                                                                                                                                                                                                    • Figure 93: Attitudes towards milk (including flavoured milk), by other types of milk and milk drinks used personally, January 2014

                                                                                                                                                                                                                Companies Covered

                                                                                                                                                                                                                • Arla Foods amba
                                                                                                                                                                                                                • Dairy Crest Group plc
                                                                                                                                                                                                                • Dean Foods Company
                                                                                                                                                                                                                • Facebook, Inc.
                                                                                                                                                                                                                • Fonterra Co-operative Group Ltd
                                                                                                                                                                                                                • FrieslandCampina
                                                                                                                                                                                                                • Greencore Group plc
                                                                                                                                                                                                                • Molkerei Alois Müller GmbH & Co
                                                                                                                                                                                                                • Nestlé UK Ltd
                                                                                                                                                                                                                • Robert Wiseman Dairies Plc
                                                                                                                                                                                                                • Starbucks Coffee Company UK Ltd
                                                                                                                                                                                                                • Tesco (UK)
                                                                                                                                                                                                                • The Danish Dairy Board
                                                                                                                                                                                                                • Thorpe Park
                                                                                                                                                                                                                • Twitter, Inc.
                                                                                                                                                                                                                • Vandemoortele Group NV
                                                                                                                                                                                                                • Weight Watchers Ltd. (UK)
                                                                                                                                                                                                                • Wiltshire Farm Foods
                                                                                                                                                                                                                • World Wildlife Fund

                                                                                                                                                                                                                Dairy Drinks, Milk and Cream - UK - April 2014

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