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Added Value in Dairy Drinks, Milk and Cream - UK - April 2019

Covered in this report

This report examines the UK retail market for milk, milk drinks and cream, including products sold via doorstop delivery as well as retail outlets. Sales of milk within the catering and industrial sectors, as well as welfare milk supplies, are excluded, though reference may be made to these where relevant.

Mintel’s definition includes:

  • White Milk: Fresh, ambient, and powdered formats. Cow’s milk in all types including semi-skimmed, skimmed, etc, other animal milks such as goat’s milk and non-dairy unflavoured plant-based milk alternatives (eg soya milk, almond milk)
  • Cream: Fresh, ambient, and aerosol formats
  • Flavoured Milk: Flavoured animal milk and plant-based milk alternatives, milk flavourings (eg Nesquik, Crusha)

“White milk continues to feel the benefits and drawbacks of its commodity status. A vast majority of consumers see milk as a staple in the household, underpinning near-universal usage. However, this also means brand differentiation remains challenging. Recycled plastics and sustainable farming garner sizeable minority interest in the milk and cream market, creating an opportunity for the industry to drive consumer engagement.”

- Max Grünefeld, Research Analyst

This report will look at the following areas:

  • A third of users are interested in recycled plastic packaging
  • Plant-based milk alternatives can benefit from further educating consumers about uses
  • Flavoured cream offers summer potential

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this Report
      • Executive Summary

          • The market
            • White milk continues to set the tone for the wider market
              • White milk set for further volume decline
                • Figure 1: UK retail value sales of white milk, flavoured milk, and cream, 2013-23
              • Cream volumes continue to fall in 2018
                • Standard cow’s milk sees its majority share fall
                  • 2018 drought puts upward pressure on prices
                    • Sugar reductions asked of milk-based drinks
                      • Companies and brands
                        • Own-label maintains its dominance in white milk
                          • Cravendale in the lead, Alpro enjoys rapid growth
                            • Figure 2: UK retail sales of white milk^, by leading brands, by value, 2018/2019*
                          • Own-label increases its lead in value sales of cream
                            • Strong performances across flavoured milk
                              • Ethical claims rise in 2018
                                • Plant-based continues to be an active sector, Innocent a high-profile newcomer
                                  • Above-the-line spending slows in 2018
                                    • The consumer
                                      • 96% of UK adults continue to use milk
                                        • Usage of plant-based products and flavoured milk has increased
                                          • Figure 3: Usage of milk, by type, February 2019
                                        • 40% of users would pay above £1.20 for a four-pint bottle of milk
                                          • Hot drinks remain the top occasions within white milk
                                            • Figure 4: Usage occasions for cow’s and plant-based milk, by type, February 2019
                                          • Environmental and ethical initiatives spark consumer interest
                                            • Figure 5: Interest in new product concepts in milk, milk drinks and cream, February 2019
                                          • Plant-based milk alternatives can boost uptake by educating consumers on usage
                                            • Less-sweet flavour profiles can address concerns over sugar in flavoured milk
                                              • Figure 6: Behaviours relating to milk, milk drinks and cream, February 2019
                                            • Youngest consumers are least positive about cow’s milk’s importance
                                              • Doorstep milk enjoys an unlikely resurgence helped by plastic backlash
                                                • Figure 7: Attitudes towards milk, milk drinks and cream, February 2019
                                              • What we think
                                              • Issues and Insights

                                                • A third of users are interested in recycled plastic packaging
                                                  • The facts
                                                    • The implications
                                                      • Plant-based milk alternatives can benefit from further educating consumers about uses
                                                        • The facts
                                                          • The implications
                                                            • Flavoured cream offers summer potential
                                                              • The facts
                                                                • The implications
                                                                • The Market – What You Need to Know

                                                                  • White milk continues to set the tone of the wider market
                                                                    • White milk set for further volume decline
                                                                      • Cream volumes continue to fall in 2018
                                                                        • Standard cow’s milk sees majority share decrease
                                                                          • 2018 drought puts upward pressure on prices
                                                                            • Sugar reduction target for milk-based drinks
                                                                            • Market Size and Forecast

                                                                              • White milk continues to set the tone of the category in 2018
                                                                                • Figure 8: UK retail value sales of white milk, flavoured milk, and cream, by major segment, 2013-23
                                                                                • Figure 9: UK retail volume sales of white milk, flavoured milk, and cream, by major segment, 2013-23
                                                                              • Price inflation and volume loss in white milk set to see market struggle
                                                                                • Figure 10: UK retail value sales of white milk, flavoured milk, and cream, 2013-23
                                                                              • White milk’s struggles continue in 2018
                                                                                • Further volume decline forecast for white milk
                                                                                  • Figure 11: UK retail value sales of white milk, 2013-23
                                                                                • Cream volumes fall again in 2018, with further decline predicted
                                                                                  • Figure 12: UK retail value sales of cream, 2013-23
                                                                                • Price inflation fuels much of flavoured milk sales
                                                                                  • Figure 13: UK retail value sales of flavoured milk, 2013-23
                                                                                • Forecast methodology
                                                                                • Market Segmentation

                                                                                  • White milk’s volume decline accelerates
                                                                                    • Cow’s milk faces pressure from health and sustainability concerns
                                                                                      • Rising prices prop up value growth
                                                                                        • Figure 14: Retail value sales of white milk, by fresh and long-life, 2016-18
                                                                                        • Figure 15: Retail volume sales of white milk, by fresh and long-life, 2016-18
                                                                                      • Conventional cow’s milk holds a shrinking majority share
                                                                                        • Newer plant-based products continue strong growth
                                                                                          • Figure 16: Retail value sales of white milk, by type, 2016-18
                                                                                          • Figure 17: Retail volume sales of white milk, by type, 2016-18
                                                                                        • Cream volume sales continue to fall
                                                                                          • Figure 18: Retail value sales of cream, by type, 2016-18
                                                                                          • Figure 19: Retail volume sales of cream, by type, 2016-18
                                                                                        • Flavoured milk finds continued success
                                                                                          • Figure 20: Retail value sales of flavoured milk, milk smoothies, and milk modifiers, 2016-18
                                                                                          • Figure 21: Retail volume sales of flavoured milk, milk smoothies, and milk modifiers, 2016-18
                                                                                      • Market Drivers

                                                                                        • Milk prices fell in the spring and rebounded in the second half of 2018
                                                                                          • The drought of summer 2018 saw price inflation in many areas
                                                                                            • Plant-based milk alternatives and flavoured milk are most affected by Pound’s fluctuations
                                                                                              • Brexit uncertainty lingers
                                                                                                • Dairy drinks are included in PHE’s efforts to reduce sugar consumption
                                                                                                  • A fifth of users limit cow’s milk for health
                                                                                                    • A fifth of people voice environmental concerns
                                                                                                      • Milk-based drinks are tasked with sugar reduction
                                                                                                      • Companies and Brands – What You Need to Know

                                                                                                        • Own-label continues its dominance in white milk
                                                                                                          • Cravendale in the lead, Alpro enjoys rapid growth
                                                                                                            • Own-label increases its lead in value sales of cream
                                                                                                              • Strong performances across flavoured milk
                                                                                                                • Ethical claims rise in 2018
                                                                                                                  • Plant-based milk alternatives remains an active sector, Innocent a high-profile newcomer
                                                                                                                    • Above-the-line spending slows in 2018
                                                                                                                    • Market Share

                                                                                                                      • Own-label continues its dominance in white milk
                                                                                                                        • Figure 22: UK retail sales of white milk^, by leading brands, 2016-18
                                                                                                                        • Figure 23: UK retail sales of white milk^, by leading brand owners, 2016-18
                                                                                                                      • Arla’s added value offerings enjoy rapid growth in 2018
                                                                                                                        • Alpro hits 100 million litres in white milk
                                                                                                                          • Own-label increases its lead in value sales of cream
                                                                                                                            • Figure 24: UK retail sales of cream, by leading brands, 2016-18
                                                                                                                            • Figure 25: UK retail sales of cream, by leading brand owners, 2016-18
                                                                                                                          • Own-label plays a minority role in flavoured milk
                                                                                                                            • Figure 26: UK retail sales of flavoured milk, by leading brands, 2016-18
                                                                                                                            • Figure 27: UK retail sales of flavoured milk, by leading brand owners, 2016-18
                                                                                                                          • Yazoo retains its position as market leader
                                                                                                                            • Frijj returns to growth in 2018
                                                                                                                              • 2018 heatwave helps Starbucks
                                                                                                                              • Start-ups and Disruptors Case Study – Neqta

                                                                                                                                • Company overview
                                                                                                                                  • What is it?
                                                                                                                                    • Founded:
                                                                                                                                      • Company mission statement:
                                                                                                                                        • Founder’s story:
                                                                                                                                          • Mintel analyst view
                                                                                                                                            • Mintel Trends
                                                                                                                                              • Why it could succeed
                                                                                                                                                • Why it could fail
                                                                                                                                                  • The verdict
                                                                                                                                                    • Product information
                                                                                                                                                      • Figure 28: Neqta, March 2019
                                                                                                                                                    • Media profile
                                                                                                                                                      • Figure 29: Social media metrics for Neqta as of March 2019
                                                                                                                                                    • The brand’s view
                                                                                                                                                      • Looking to the future
                                                                                                                                                      • Launch Activity and Innovation

                                                                                                                                                        • Ethical claims rise across the board
                                                                                                                                                          • Figure 30: New product launches in the UK milk, dairy drinks and cream market^ carrying an ethical claim, by claim, 2015-19
                                                                                                                                                        • a2 milk ditches plastic bottles
                                                                                                                                                          • Figure 31: A2 Semi-Skimmed Cow's Milk, 2018
                                                                                                                                                        • Asda launches AR app to educate consumers on recycling
                                                                                                                                                          • Organic claims shoot up
                                                                                                                                                            • Yeo Valley rolls out 1.5-litre organic milk
                                                                                                                                                              • Plant-based continues to be a hotbed of activity
                                                                                                                                                                • Figure 32: New product launches in the UK milk, dairy drinks and cream market carrying dairy-free and vegan claims, 2015-19
                                                                                                                                                              • Innocent makes its first foray into plant-based milk alternatives in 2018
                                                                                                                                                                • Figure 33: Innocent’s dairy alternative products, April 2018
                                                                                                                                                              • Alpro adds a premium string to its bow
                                                                                                                                                                • Oatly continues to expand its portfolio
                                                                                                                                                                  • Whole Foods to introduce Mighty Society Pea Milk
                                                                                                                                                                    • Own-label invests in freshening up their dairy alternatives
                                                                                                                                                                      • Good Hemp unveils dairy alternative chilled hemp milk
                                                                                                                                                                        • Koko introduces Super fortified milk alternative
                                                                                                                                                                          • Sugar reductions made in flavoured milk
                                                                                                                                                                            • Yazoo relaunches its No Added Sugar range as Yazoo Kids
                                                                                                                                                                              • Figure 34: Yazoo relaunch of no added sugar range, November 2018
                                                                                                                                                                            • Coffee remains a popular flavour in flavoured milk NPD
                                                                                                                                                                              • Alpro introduces on-the-go to its portfolio
                                                                                                                                                                                • Figure 35: Alpro’s Caffè range of RTD drinks, November 2018
                                                                                                                                                                              • Shaken Udder expands its core range
                                                                                                                                                                              • Advertising and Marketing Activity

                                                                                                                                                                                • Above-the-line spending slows in 2018
                                                                                                                                                                                  • Figure 36: Total above-the-line, online display, and direct mail advertising expenditure on milk, milk drinks and cream, 2015-19
                                                                                                                                                                                • Arla Protein builds links with exercise on social media
                                                                                                                                                                                  • Figure 37: Arla Protein social media campaign, December 2017
                                                                                                                                                                                • Yazoo explores both health and taste
                                                                                                                                                                                  • Continued investment in the plant-based sector
                                                                                                                                                                                    • Alpro steps up invests heavily under Danone
                                                                                                                                                                                      • Innocent opens strong in plant-based
                                                                                                                                                                                        • Oatly brings controversial campaign to the UK
                                                                                                                                                                                          • Figure 38: Outdoor advertising for Oatly, October 2018
                                                                                                                                                                                        • AHDB and Dairy UK aim to remind consumers of their love of dairy
                                                                                                                                                                                          • Figure 39: Outdoor advertising for AHDB 2018 consumer campaign, August 2018
                                                                                                                                                                                        • Hillgreen launches online ‘Mission4Milk’ campaign
                                                                                                                                                                                          • Nielsen Ad Intel coverage
                                                                                                                                                                                          • The Consumer – What You Need to Know

                                                                                                                                                                                            • 96% of UK adults continue to use milk
                                                                                                                                                                                              • Usage of plant-based milk alternatives and flavoured milk has increased
                                                                                                                                                                                                • 40% of users would pay above £1.20 for a four-pint bottle of milk
                                                                                                                                                                                                  • Hot drinks remain the top occasions within white milk
                                                                                                                                                                                                    • Environmental and ethical initiatives spark consumer interest
                                                                                                                                                                                                      • Plant-based milk alternatives can boost uptake by educating consumers on usage
                                                                                                                                                                                                        • Less-sweet flavour profiles can address concerns over sugar in flavoured milk
                                                                                                                                                                                                          • Youngest consumers are least positive about cow’s milk importance
                                                                                                                                                                                                            • Doorstep milk enjoys an unlikely resurgence helped by plastic backlash
                                                                                                                                                                                                            • Usage of Milk, Dairy Drinks and Cream

                                                                                                                                                                                                              • UK adult usage of milk remains at 96%
                                                                                                                                                                                                                • Figure 40: Usage of milk, by type, February 2019
                                                                                                                                                                                                              • Standard cow’s milk continues to lose relevance for younger consumers
                                                                                                                                                                                                                • Women are at the forefront of plant-based milk alternatives usage
                                                                                                                                                                                                                  • Most plant-based alternatives users also use cow’s milk
                                                                                                                                                                                                                    • Growth in flavoured milk usage reflected in volume sales
                                                                                                                                                                                                                      • Figure 41: Usage of milk and milk drinks, by variety, February 2019
                                                                                                                                                                                                                    • Semi-skimmed remains dominant
                                                                                                                                                                                                                      • Cream usage up at 58%
                                                                                                                                                                                                                        • Figure 42: Usage of cream, by type, February 2019
                                                                                                                                                                                                                    • How Much Consumers are Prepared to Pay for Milk

                                                                                                                                                                                                                      • The 2018 price rise of the four-pint milk looks to have become embedded
                                                                                                                                                                                                                        • 40% of users would pay above £1.20 for milk
                                                                                                                                                                                                                            • Figure 43: How much consumers are prepared to pay for milk, February 2019
                                                                                                                                                                                                                        • Usage Occasions for Cow’s Milk and Plant-Based Milk Alternatives

                                                                                                                                                                                                                          • Use with hot drinks remains top occasion across white milk
                                                                                                                                                                                                                            • Figure 44: Usage occasions for cow’s milk and plant-based milk alternatives, by type, February 2019
                                                                                                                                                                                                                          • Cow’s milk is widely used with cereal, plant-based alternatives lag behind
                                                                                                                                                                                                                            • Figure 45: Innocent announces new dairy-free drinks range on social media, September 2018
                                                                                                                                                                                                                        • Interest in New Product Concepts in Milk, Milk Drinks and Cream

                                                                                                                                                                                                                          • A third of users are interested in recycled plastic packaging
                                                                                                                                                                                                                            • Milk bottles’ recycled plastic can be a selling point
                                                                                                                                                                                                                              • Figure 46: Interest in new product concepts in milk, milk drinks and cream, February 2019
                                                                                                                                                                                                                            • Other green initiatives should also chime
                                                                                                                                                                                                                              • Interest in sustainable farming drives communication in plant-based milk alternatives
                                                                                                                                                                                                                                • 29% of cow’s milk users are interested in sustainable farming
                                                                                                                                                                                                                                  • Figure 47: Alpro original oat drink and Arla Organic Free Range Milk, February 2019 and August 2018
                                                                                                                                                                                                                                • Flavoured cream has potential beyond Christmas
                                                                                                                                                                                                                                  • Figure 48: Häagen-Dazs advertising linking with Wimbledon tennis championships, June 2018
                                                                                                                                                                                                                              • Behaviours Relating to Milk, Milk Drinks and Cream

                                                                                                                                                                                                                                • Plant-based milk alternatives can benefit from further educating consumers about uses
                                                                                                                                                                                                                                  • Figure 49: Behaviours relating to milk, milk drinks and cream, February 2019
                                                                                                                                                                                                                                • Sugar concerns remain a key put-off for flavoured milk
                                                                                                                                                                                                                                  • Scope to look to less-sweet flavour profiles
                                                                                                                                                                                                                                    • Organic products not seen to deliver value
                                                                                                                                                                                                                                    • Attitudes towards Milk, Milk Drinks and Cream

                                                                                                                                                                                                                                      • Traditional health connotations endure for cow’s milk
                                                                                                                                                                                                                                        • Youngest groups are the least positive about milk’s importance
                                                                                                                                                                                                                                          • Figure 50: Attitudes towards milk, milk drinks and cream, February 2019
                                                                                                                                                                                                                                        • Doorstep milk enjoys an unlikely resurgence helped by plastic backlash
                                                                                                                                                                                                                                          • A case for driving awareness of green credentials of plastic bottles
                                                                                                                                                                                                                                            • Cost and one-stop shopping are barriers to doorstep delivery
                                                                                                                                                                                                                                            • Appendix – Data Sources, Abbreviations, and Supporting Information

                                                                                                                                                                                                                                                • Abbreviations
                                                                                                                                                                                                                                                  • Consumer research methodology
                                                                                                                                                                                                                                                  • Appendix – Launch Activity and Innovation

                                                                                                                                                                                                                                                      • Figure 51: New product launches in the UK milk, dairy drinks and cream market^, top 20 claims (sorted by 2018) 2015-19
                                                                                                                                                                                                                                                  • Appendix – Market Size and Forecast

                                                                                                                                                                                                                                                    • Total market
                                                                                                                                                                                                                                                      • Figure 52: UK retail volume sales of white milk, flavoured milk, and cream, 2013-23
                                                                                                                                                                                                                                                      • Figure 53: Best- and worst-case forecast of UK sales of milk, milk drinks and cream, by value, 2018-23
                                                                                                                                                                                                                                                      • Figure 54: Best- and worst-case forecast of UK sales of milk, milk drinks and cream, by volume, 2018-23
                                                                                                                                                                                                                                                    • White milk
                                                                                                                                                                                                                                                      • Figure 55: UK retail volume sales of white milk, 2013-23
                                                                                                                                                                                                                                                      • Figure 56: Best- and worst-case forecast of UK sales of white milk, by value, 2018-23
                                                                                                                                                                                                                                                      • Figure 57: Best- and worst-case forecast of UK sales of white milk, by volume, 2018-23
                                                                                                                                                                                                                                                    • Cream
                                                                                                                                                                                                                                                      • Figure 58: UK retail volume sales of cream, 2013-23
                                                                                                                                                                                                                                                      • Figure 59: Best- and worst-case forecast of UK sales of cream, by value, 2018-23
                                                                                                                                                                                                                                                      • Figure 60: Best- and worst-case forecast of UK sales of cream, by volume, 2018-23
                                                                                                                                                                                                                                                    • Flavoured milk
                                                                                                                                                                                                                                                      • Figure 61: UK retail volume sales of flavoured milk, 2013-23
                                                                                                                                                                                                                                                      • Figure 62: Best- and worst-case forecast of UK sales of milk drinks, by value, 2018-23
                                                                                                                                                                                                                                                      • Figure 63: Best- and worst-case forecast of UK sales of milk drinks, by volume, 2018-23
                                                                                                                                                                                                                                                    • Forecast methodology

                                                                                                                                                                                                                                                    Added Value in Dairy Drinks, Milk and Cream - UK - April 2019

                                                                                                                                                                                                                                                    £1,995.00 (Excl.Tax)