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Dairy Milk - US - October 2017

"Sales in the dairy milk category have declined since 2012 and are expected to continue this trend, as non-dairy milk gains momentum and consumers are faced with a myriad of nutritious, functional beverages to choose from. A bright spot in the category has been flavored and whole milks, especially among parents, as consumers primarily choose milk based on taste and flavor. Sales of traditional milks seen as a commodity may be price driven, but brands that stand out by adding a value to consumers’ lives, with added vitamins or aiding in digestion, can win consumer dollars and remain competitive with other categories."
- Megan Hambleton, Beverage Analyst

This Report looks at the following areas:

  • The dairy milk category continues sales declines
  • Habitual purchase patterns stall the category
  • Non-dairy milks continue strong growth
  • Skim/low-fat milks lack appeal to general population

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • The dairy milk category continues sales declines
            • Figure 1: Total US sales and fan chart forecast of market, at current prices, 2012-22
          • Habitual purchase patterns stall the category
            • Figure 2: Shifts in consumption of any dairy milk, July 2017
          • Non-dairy milks continue strong growth
            • Figure 3: Non-dairy milk purchase, July 2017
          • Skim/low-fat milks lack appeal to general population
            • Figure 4: Perceptions of whole and skim/low-fat milk, July 2017
          • The opportunities
            • Less traditional milks see increased purchase
              • Figure 5: Shifts in consumption, July 2017
            • 98% of parents purchase dairy milk
              • Figure 6: Dairy milk purchase, by parental status, July 2017
            • Natural, nutritional value of milk increase importance
              • Figure 7: Purchase incentives, by dairy milk purchase, July 2017
            • Brands matter for milks with added value
              • Figure 8: Attitudes toward milk, by dairy milk type purchased, July 2017
            • What it means
            • The Market – What You Need to Know

              • Dairy milk category continues to struggle
                • Whole, flavored milks’ growth can’t stop category loss
                  • Price volatility, demand strains industry
                    • Millennials reaching pivotal life stages for dairy milk consumption
                    • Market Size and Forecast

                      • Future of dairy milk to maintain a downward trend
                        • Figure 9: Total US sales and fan chart forecast of market, at current prices, 2012-22
                        • Figure 10: Total US retail sales and forecast of dairy milk, at current prices, 2012-22
                        • Figure 11: Total US retail sales and forecast of dairy milk, at inflation-adjusted prices, 2012-22
                    • Market Breakdown

                      • Skim/low-fat losing way to whole milk, flavored options
                        • Figure 12: Total US retail sales of dairy milk, by segment, at current prices, 2015 and 2017
                      • Category loss driven by skim/low-fat milk
                        • Figure 13: Total US retail sales of dairy milk, percent change in sales, by segment, at current prices, 2015 and 2017
                        • Figure 14: Total US retail sales of dairy milk, by segment, at current prices, 2012-22
                      • Lactose-free offerings flourish at natural channel
                        • Figure 15: Natural supermarket sales of dairy milk, by lactose free, at current prices, rolling 52 weeks ending 7/19/15 and 7/16/17
                      • Animal welfare claims grow
                        • Figure 16: Natural supermarket sales of dairy milk, by animal welfare label, at current prices, rolling 52 weeks ending 7/19/15 and 7/16/17
                      • Sales split between supermarket and ‘other’ channels
                        • Figure 17: Total US retail sales of dairy milk, market share by channel, at current prices, 2015 and 2017
                        • Figure 18: Total US retail sales of dairy milk, percent change by channel, at current prices, 2016-17
                    • Market Perspective

                      • Interest in non-dairy milk grows
                        • Figure 19: Non-dairy milk purchase, July 2017
                      • FDA approves ultra-filtered milk in cheese production
                        • Dairy milk fights back against non-dairy alternatives
                          • Heightened production, low milk prices, and demand strain industry
                            • Figure 20: Milk production and average price per gallon by year, 2000-16
                          • Perimeter of the store gains attention
                            • Figure 21: Attitudes toward the perimeter, April 2017
                          • Organic claims resonate stronger with fresh foods
                            • Figure 22: Category preferences, April 2017
                        • Market Factors

                          • Lactose intolerance higher among multicultural consumers
                            • Millennials are parents
                              • Figure 23: Households with own children under age 18, by age of householder, 2016
                            • Loyal older generations shrink
                              • Figure 24: Percentage of population by generation, 2012-22
                            • Consumers experiment with plant-based food and drink
                              • Figure 25: Attitudes toward BFY foods, by age and gender, June 2016
                          • Key Players – What You Need to Know

                            • Private label brands dominate sales
                              • Taste and nutrition win out
                                • Skim, low-fat milks fail to keep up
                                  • Branding and added nutrition will excite the category
                                  • Company and Brand Sales of Dairy Milk

                                    • Minimal shifts within the category
                                      • Figure 26: MULO sales of dairy milk, by leading companies, rolling 52 weeks 2016 and 2017
                                      • Figure 27: MULO sales of dairy milk, by leading companies, rolling 52 weeks 2016 and 2017
                                    • Private label brands dominate skim/low-fat and whole milk segments
                                      • Figure 28: MULO sales of whole and skim/low-fat milk, by leading companies and brands, rolling 52 weeks 2017
                                    • fairlife makes its mark in flavored dairy milk segment
                                      • Figure 29: MULO sales of flavoured milk, by leading companies and brands, percent change, rolling 52 weeks 2016 and 2017
                                    • Whitewave sees minimal growth amid declining shelf-stable sales
                                      • Figure 30: MULO sales of shelf stable milk, by leading companies and brands, percent change, rolling 52 weeks 2016 and 2017
                                  • What’s Working?

                                    • Private Label
                                      • Figure 31: US number of entries per year of white or flavored dairy milk by branded and private label
                                    • Whole milk
                                      • Flavored milk
                                        • Lactose-free expands beyond the dietary restricted
                                          • Figure 32: Natural supermarket sales of dairy milk, by lactose free, at current prices, rolling 52 weeks ending 7/19/15 and 7/16/17
                                      • What’s Struggling?

                                        • Skim, low-fat milks
                                          • Figure 33: Total US retail sales and forecast of dairy milk, skim/low-fat milk segment, at current prices, 2012-22
                                      • What’s Next?

                                        • Value-added dairy milk
                                          • Branded dairy milk
                                          • The Consumer – What You Need to Know

                                            • 2%, whole milks most popular
                                              • Flavored milks appeal to kids, consumed by adults
                                                • Purchase of dairy milk stalls
                                                  • Taste drives dairy milk purchase
                                                    • Despite sales growth, lactose-free milks not seen as healthy
                                                      • Cereal drives dairy milk consumption, drinking a glass of milk and cooking secondary uses
                                                        • Consumers begin to avoid dairy
                                                          • Consumers willing to pay extra for milks less commodified
                                                            • Skim, low-fat milks trail whole milk in associations that drive purchase
                                                            • Dairy Milk Purchase

                                                              • 2%, whole milks receive consumer preference
                                                                • Figure 34: Dairy milk purchase, July 2017
                                                              • Half of dairy milk consumers purchase non-dairy milk
                                                                • Figure 35: Dairy milk purchase, by non-dairy milk purchase, July 2017
                                                              • Non-dairy milk purchase encroaches dairy milk space
                                                                • Figure 36: Dairy and non-dairy milk purchase, by age, July 2017
                                                              • Specialty dairy milk purchase driven by parents
                                                                • Figure 37: Dairy milk purchase, by parental status, July 2017
                                                              • Black consumers dedicated to 2%, whole milk
                                                                • Figure 38: Dairy milk purchase by race, July 2017
                                                            • Household Consumption of Dairy Milk

                                                              • Milks lower in fat more for adult consumption
                                                                • Flavored milk appeals to adults, too
                                                                  • Figure 39: Household consumption, July 2017
                                                                • Parents purchase non-dairy for self, dairy for children
                                                                  • Figure 40: Household consumption, by dairy and non-dairy milk type, July 2017
                                                              • Shifts in Purchase

                                                                • Purchase of dairy milk has somewhat stalled
                                                                  • Figure 41: Shifts in consumption of any dairy milk, July 2017
                                                                • Traditional dairy milks making way for others
                                                                  • Figure 42: Shifts in consumption, July 2017
                                                                • Dairy milk consumers also increasing non-dairy milk purchase
                                                                  • Figure 43: Shifts in consumption of any non-dairy milk, by dairy milk purchase, July 2017
                                                                • Life stage determines milk habits
                                                                  • Figure 44: Shifts in consumption of any dairy milk, by age, July 2017
                                                              • Incentives for Purchase

                                                                • Taste drives purchase of milk, dairy and non-dairy
                                                                  • Figure 45: Purchase incentives, July 2017
                                                                • Consumers of dairy milk hold lower concern of nutritional factors than non-dairy
                                                                  • Figure 46: Purchase incentives, by any dairy and non-dairy purchase, July 2017
                                                                • Vitamins, natural ingredients, protein drivers of growing dairy milk types
                                                                  • Figure 47: Purchase incentives, by dairy milk purchase, July 2017
                                                                • Men, fathers swayed by protein content
                                                                  • Figure 48: Purchase incentives of dairy or non-dairy milk, by gender and parental status, July 2017
                                                                • Hispanic and Asian consumers seek natural milks
                                                                  • Figure 49: Purchase incentives of dairy or non-dairy milk, by race and Hispanic origin, July 2017
                                                              • Health Perceptions

                                                                • Whole milk leads ranking of healthiest milks
                                                                  • Figure 50: Health perceptions, July 2017
                                                                • Non-dairy milk consumption shifts views of healthfulness away from dairy
                                                                  • Figure 51: Health perception, any rank, by any dairy milk purchase and any non-dairy milk purchase, July 2017
                                                                • Females see more healthfulness in skim/low-fat, almond milks
                                                                  • Figure 52: Health perceptions, any rank, by gender, July 2017
                                                                • Younger consumers mixed about healthiest milks, older stay loyal to dairy
                                                                  • Figure 53: Health perception, any rank, by generation, July 2017
                                                              • Usage Occasions

                                                                • Dairy milk still a go-to for cereal, drink, and ingredient
                                                                  • Figure 54: Usage occasions, by any dairy and non-dairy purchase, July 2017
                                                                • Flavored milk used as a drink, post workout, on-the-go
                                                                  • Figure 55: Usage occasions, July 2017
                                                                • Youngest consumers driving mealtime consumption
                                                                  • Figure 56: Usage occasions – Drink with a meal, part 1, by age, July 2017
                                                                  • Figure 57: Usage occasions – Drink with a meal, part 2, by age, July 2017
                                                                • Urban consumers use milk for broad range of tasks
                                                                  • Figure 58: Usage occasions of any dairy milk, by type of area, July 2017
                                                              • Attitudes toward Dairy Consumption

                                                                • One in five adults is consuming less dairy to stay healthy
                                                                  • Figure 59: Attitudes toward dairy, July 2017
                                                                • Non-dairy milk consumers limit overall dairy for health reasons
                                                                  • Figure 60: Attitudes toward dairy, by any dairy and any non-dairy purchase, July 2017
                                                                • Low-fat, organic milk consumers more likely to limit dairy consumption
                                                                  • Figure 61: Attitudes toward dairy, by dairy milk purchase, July 2017
                                                                • Young consumers starting to look outside of dairy for health benefits
                                                                  • Figure 62: Attitudes toward dairy, by generation, July 2017
                                                              • Attitudes toward Brands

                                                                • Brands may catch the eye, but for the right price
                                                                  • Figure 63: Attitudes toward milk, July 2017
                                                                • Brands matter less to dairy consumers than non-dairy
                                                                  • Figure 64: Attitudes toward milk, by any dairy or non-dairy milk purchase, July 2017
                                                                • Less traditional milks ignite more brand loyalty
                                                                  • Figure 65: Attitudes toward milk, by dairy milk type purchased, July 2017
                                                                • Brands appeal regardless of age, older not as willing to pay
                                                                  • Figure 66: Attitudes toward milk, by generation, July 2017
                                                              • Attitudes toward Flavor

                                                                • Innovative flavors appeal to niche audiences, not overall consumers
                                                                  • Figure 67: Attitudes toward milk, July 2017
                                                                • New flavors draw in non-dairy consumers, less so dairy
                                                                  • Figure 68: Attitudes toward milk, flavor innovation, July 2017
                                                                • Fathers intrigued by flavor innovation in milk
                                                                  • Figure 69: Attitudes toward milk, by gender and parental status, July 2017
                                                                • Flavor sparks interest among Hispanics
                                                                  • Figure 70: Attitudes toward milk, by race and Hispanic origin, July 2017
                                                              • Milk Associations

                                                                • Associations with dairy milk link to purchase
                                                                  • Figure 71: Perceptions of dairy and non-dairy milk, July 2017
                                                                • Skim/low-fat trails whole milk in nearly all areas
                                                                  • Figure 72: Perceptions of whole and skim/low-fat milk, July 2017
                                                                • Milk’s association with drinking is lessening
                                                                  • Figure 73: Perceptions of whole and skim/low-fat milk, “good to drink with a meal,” July 2017
                                                                • White consumers more likely to see benefits of skim/low-fat milk
                                                                  • Figure 74: Perceptions of whole and skim/low-fat dairy milks, by race and Hispanic origin, July 2017
                                                              • Appendix – Data Sources and Abbreviations

                                                                • Data sources
                                                                  • Sales data
                                                                    • Fan chart forecast
                                                                      • Consumer survey data
                                                                        • Abbreviations and terms
                                                                          • Abbreviations
                                                                            • Terms
                                                                            • Appendix – The Market

                                                                                • Figure 75: Total US retail sales of dairy milk, by segment, at current prices, 2015 and 2017
                                                                                • Figure 76: Total US retail sales and forecast of skim/low-fat milk, at current prices, 2012-22
                                                                                • Figure 77: Total US retail sales and forecast of skim/low-fat milk, at inflation-adjusted prices, 2012-22
                                                                                • Figure 78: Total US retail sales and forecast of whole milk, at current prices, 2012-22
                                                                                • Figure 79: Total US retail sales and forecast of whole milk, at inflation-adjusted prices, 2012-22
                                                                                • Figure 80: Total US retail sales and forecast of flavored milk, at current prices, 2012-22
                                                                                • Figure 81: Total US retail sales and forecast of flavored milk, at inflation-adjusted prices, 2012-22
                                                                                • Figure 82: Total US retail sales and forecast of shelf stable dairy milk, at current prices, 2012-22
                                                                                • Figure 83: Total US retail sales and forecast of shelf stable dairy milk, at inflation-adjusted prices, 2012-22
                                                                                • Figure 84: Total US retail sales of dairy milk, by channel, at current prices, 2012-17
                                                                                • Figure 85: Total US sales and fan chart forecast of skim/low-fat milk, at current prices, 2012-22
                                                                                • Figure 86: Total US sales and fan chart forecast of whole milk, at current prices, 2012-22
                                                                                • Figure 87: Total US sales and fan chart forecast of flavored milk, at current prices, 2012-22
                                                                                • Figure 88: Total US sales and fan chart forecast of shelf stable dairy milk, at current prices, 2012-22
                                                                            • Appendix – Key Players

                                                                                • Figure 89: MULO sales of skim/low-fat milk, by leading companies and brands, rolling 52 weeks 2016 and 2017
                                                                                • Figure 90: MULO sales of whole milk, by leading companies and brands, rolling 52 weeks 2016 and 2017
                                                                                • Figure 91: MULO sales of flavoured milk, by leading companies and brands, rolling 52 weeks 2016 and 2017
                                                                                • Figure 92: MULO sales of shelf stable milk, by leading companies and brands, rolling 52 weeks 2016 and 2017

                                                                            Companies Covered

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                                                                            Dairy Milk - US - October 2017

                                                                            US $3,995.00 (Excl.Tax)