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UK Added Value in Dairy Drinks, Milk and Cream market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Added Value in Dairy, Milk and Cream market, its consumers and the major players who make up that market.

Market

Point of sale market data

In conjunction with IRi, extensive point of sale data shows you what consumers are spending their money on

Market Size

How big is the market today and what is our 5 year forecast? Includes both best & worst case scenarios

Market Segmentation

What are the different segments within the market and how are those individual segments performing?

Consumer

Consumer behaviors

What are consumers looking for, what drives their buying habits and what are their main purchase influencers?

Demographic breakdown

From iGen & Millennials to Baby Boomers & beyond. Who is spending money and what are they spending it on?

Representative sample

We gather our data from real-world consumers, selected to accurately reflect precise global demographics

Players

Company strategy

What are the key players doing, what has been successful for them and what was their marketing spend?

Product innovation

Using data from our Global New Product Database, what products were launched and how well were they perceived?

Opportunities

What happens next, which areas are likely to experience growth and what opportunities exist within the market?

Expert analysis from a specialist in the field

Written by Alice Baker, a leading analyst in the Food & Drink sector, her extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Animal welfare attracts strong consumer interest. Recent negative publicity around the dairy industry adds further urgency for high-welfare dairy systems to tangibly demonstrate their credentials to consumers. High-welfare products will also need a prominent positioning in-store to disrupt most people’s habitual approach to buying milk. Alice Baker
Research Analyst

Mintel has the answers you’re looking for

What are the key challenges facing the industry and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

This report discusses the following key topics:

Products 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 milks (eg soya milk, almond milk).
  • Cream: Fresh, ambient and aerosol formats.
  • Flavoured Milk: Flavoured animal and plant-based milks, milk flavourings (eg Nesquik, Crusha).

Excluded:

  • Baby milk
  • Fermented milk drinks and yogurt drinks
  • Fruit juice smoothies made with milk/cream/yogurt where the dairy component is not the major constituent

What you need to know

Estimated at £4.1 billion in 2017, the UK milk, milk drinks and cream market saw values fall by 2.6% over 2012-17, mainly as a result of price volatility in the dominant white milk segment. White milk and cream are anticipated to see volume sales declines going forward, but flavoured milk should see further, though diminishing, growth. Therefore value sales of milk, milk drinks and cream are projected to rise by 1.2% to reach £4.2 billion and volume sales to fall by 1.3% to 5.6 billion litres by 2022.

Milk’s role as a household staple is undeniable as 96% of UK adults use milk of some kind. Standard cow’s milk remains the most widely used type at 86%, unchanged from last year. High animal welfare is a promising area for companies to explore, while there is a need for the industry to promote milk’s health benefits more widely.

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Table of contents

  1. Overview

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

          • The market
            • Price rises in all segments in 2017
              • Weakness of white milk and cream to continue to overshadow the category over 2018-22
                • Figure 1: UK retail value sales of milk, milk drinks and cream, 2012-22
              • Cow’s milk continues to dominate white milk but sees sales slip
                • Cream’s decline continues, further sales growth for flavoured milk
                  • Public health focus both hinders and boosts the category
                    • Companies and brands
                      • Own-label continues to dominate milk
                        • Arla brands see mixed fortunes
                          • Figure 2: UK retail sales of white milk^, by leading brands, by value, 2017/18*
                        • Dairy alternatives lead on L/N/R sugar
                          • Growth in fortified launches
                            • Advertising on milk and cream falls in 2017
                              • Dairy industry steps up marketing activity
                                • The consumer
                                  • 96% of UK adults use milk
                                    • Figure 3: Usage of milk, by type, February 2018
                                  • Most users would pay more than £1 for a four-pint bottle of milk
                                    • Niche retail availability limits uptake of ethical milks
                                      • Figure 4: Awareness and usage of added-value milks, by type, February 2018
                                    • Consumer interest in animal welfare does not always translate to buying
                                      • Figure 5: Behaviours relating to milk, dairy drinks and cream, February 2018
                                    • Multiple barriers to drinking milk out of home
                                      • Figure 6: Attitudes towards milk, dairy drinks and cream, February 2018
                                    • What we think
                                    • Issues and Insights

                                      • Focus on iodine should help to boost milk’s health image
                                        • The facts
                                          • The implications
                                            • Need for ethical dairy systems to highlight their animal welfare credentials
                                              • The facts
                                                • The implications
                                                  • Social media can help to drive cream cooking occasions
                                                    • The facts
                                                      • The implications
                                                      • The Market – What You Need to Know

                                                        • Price rises in all segments in 2017
                                                          • Weakness of white milk and cream to continue to overshadow the category over 2018-22
                                                            • Cow’s milk continues to dominate white milk but sees sales slip
                                                              • Cream’s decline continues, further sales growth for flavoured milk
                                                                • Public health focus both hinders and boosts the category
                                                                • Market Size and Forecast

                                                                  • Price volatility of white milk impacts the entire market from 2012-17
                                                                    • Inflation in all segments in 2017
                                                                      • Figure 7: UK retail value sales of white milk*, cream and flavoured milk, by segment, 2012-22
                                                                      • Figure 8: UK retail volume sales of white milk*, cream and flavoured milk, by segment, 2012-22
                                                                    • Weakness of white milk and cream to continue to overshadow the category over 2018-22
                                                                      • Figure 9: UK retail value sales of milk, milk drinks and cream, 2012-22
                                                                    • Retailer price competition set to curb white milk inflation over 2018-22
                                                                      • White milk to lose out from cow’s milk’s ageing user base
                                                                        • Growth in non-dairy milks to slow
                                                                          • Figure 10: UK retail value sales of white milk, 2012-22
                                                                        • Health concerns and changed cooking habits to continue to impede cream volume sales over 2018-22
                                                                          • Faster inflation expected for cream than milk
                                                                            • Figure 11: UK retail value sales of cream, 2012-22
                                                                          • Flavoured milk volume sales growth to lose momentum from 2018-22
                                                                            • Slower inflation expected in flavoured milk for 2018-22 than in 2017
                                                                              • Figure 12: UK retail value sales of flavoured milk, 2012-22
                                                                            • Forecast methodology
                                                                            • Market Segmentation

                                                                              • Cow’s milk sees further volume decline in 2017
                                                                                • Rising prices push up value sales despite falling volumes
                                                                                  • Figure 13: Retail value sales of white milk, by fresh and long-life, 2015-17
                                                                                  • Figure 14: Retail volume sales of white milk, by fresh and long-life, 2015-17
                                                                                • Conventional cow’s milk remains dominant
                                                                                  • Filtered milk struggles to distinguish itself to consumers
                                                                                    • Further strong growth for almond and coconut milks
                                                                                      • Figure 15: Retail value sales of white milk, by type, 2015-17
                                                                                      • Figure 16: Retail volume sales of white milk, by type, 2015-17
                                                                                    • Health concerns and consumers’ more varied meal repertoires hit cream
                                                                                      • Cream prices rise sharply in 2017
                                                                                        • Double cream remains the leading cream type
                                                                                          • Figure 17: UK retail value sales of cream, by type, 2015-17
                                                                                          • Figure 18: UK retail volume sales of cream, by type, 2015-17
                                                                                        • Second year of growth for flavoured milk
                                                                                          • Pound’s depreciation drives up flavoured milk prices in 2017
                                                                                            • Artificial image impedes milk modifiers
                                                                                              • Figure 19: UK retail value sales of flavoured milk, milk smoothies and milk flavourings, 2015-17
                                                                                              • Figure 20: UK retail volume sales of flavoured milk, milk smoothies and milk flavourings, 2015-17
                                                                                          • Market Drivers

                                                                                            • Milk prices continue to rise for most of 2017
                                                                                              • Pound’s weakness supports export demand and ups price of flavoured milk in 2017
                                                                                                • Uncertainties surround government’s post-Brexit policies
                                                                                                  • Public health focus both hinders and boosts the category
                                                                                                    • A quarter of users have cut back on cow’s milk
                                                                                                      • Flavoured milk benefits from its exemption from the sugar tax
                                                                                                      • Companies and Brands – What You Need to Know

                                                                                                        • Own-label continues to dominate milk
                                                                                                          • Arla brands see mixed fortunes
                                                                                                            • Dairy alternatives lead on L/N/R sugar
                                                                                                              • Growth in fortified launches
                                                                                                                • Advertising on milk and cream falls in 2017
                                                                                                                  • Dairy industry steps up marketing activity
                                                                                                                  • Market Share

                                                                                                                    • Own-label retains its lead in white milk
                                                                                                                      • Figure 21: UK retail sales of white milk^, by leading brands, 2015/16-2017/18
                                                                                                                      • Figure 22: UK retail sales of white milk^, by leading brand owners, 2015/16-2017/18
                                                                                                                    • Mixed results for Arla brands
                                                                                                                      • Arla acquires part of Yeo Valley’s dairy business
                                                                                                                        • Alpro continues to benefit from the growth in the free-from market
                                                                                                                          • Danone completes WhiteWave acquisition
                                                                                                                            • Own-label remains leader of declining cream market
                                                                                                                              • Figure 23: UK retail sales of cream, by leading brands, 2015/16-2017/18
                                                                                                                              • Figure 24: UK retail sales of cream, by leading brand owners, 2015/16-2017/18
                                                                                                                            • Yazoo sales recover in buoyant flavoured milk market
                                                                                                                              • Figure 25: UK retail sales of flavoured milk, milk flavourings and dairy smoothies, 2015/16-2017/18
                                                                                                                            • Further struggles for Frijj
                                                                                                                              • Continued NPD activity drives further growth for own-label
                                                                                                                                • Unusual flavours boost smaller brands
                                                                                                                                • Launch Activity and Innovation

                                                                                                                                  • L/N/R allergen claims climb rapidly in 2017
                                                                                                                                    • Brands and retailers explore less commonly seen ingredients
                                                                                                                                      • Rude Health innovates with milk types
                                                                                                                                        • Figure 26: New product launches in the UK milk, dairy drinks and cream market^, by top 20 claims (sorted by 2017), 2014-18
                                                                                                                                      • Retailers build up their lactose-free ranges
                                                                                                                                        • Dairy alternatives lead on L/N/R sugar claims in 2017
                                                                                                                                          • Smaller brands explore L/N/R sugar flavoured non-dairy milk drinks
                                                                                                                                            • Growth in L/N/R sugar milk flavourings
                                                                                                                                              • Growth in fortified launches
                                                                                                                                                • Arla adds white milk to Protein range
                                                                                                                                                  • Animal welfare claims grow but remain niche
                                                                                                                                                    • Arla rebrands its organic milk as free-range
                                                                                                                                                      • M&S secures RSPCA Assured certification for its dairy farms
                                                                                                                                                        • Morrisons adds extra welfare requirements to Milk for Farmers
                                                                                                                                                          • Brands and retailers explore different packaging formats
                                                                                                                                                            • Müller reduces size of Frijj and introduces sharing format
                                                                                                                                                              • The Co-operative’s mini cartons target lunchbox occasions
                                                                                                                                                                • M&S adds clotted cream in single-serve pot
                                                                                                                                                                  • Flavoured milk brands aim for a more adult audience
                                                                                                                                                                    • Further growth in coffee-flavoured milks
                                                                                                                                                                      • Milk with valerian claims to improve sleep
                                                                                                                                                                        • Crossover brands enter the flavoured milk category
                                                                                                                                                                        • Advertising and Marketing Activity

                                                                                                                                                                          • Advertising spend falls in 2017
                                                                                                                                                                            • Figure 27: Total above-the-line, online display and direct mail advertising expenditure on milk, milk drinks and cream, 2014-17 (sorted by 2017)
                                                                                                                                                                          • Arla continues to lead on advertising despite spending cutbacks
                                                                                                                                                                            • Cravendale puts the focus on freshness in new TV advert
                                                                                                                                                                              • YouTube adverts for organic milk highlight the cows’ idyllic life
                                                                                                                                                                                • Social media campaign promotes different milk drinks for different coffee drinks
                                                                                                                                                                                  • Further sampling for Best of Both
                                                                                                                                                                                    • FrieslandCampina ups spending as it supports Yazoo
                                                                                                                                                                                      • Cinema advert for no-added-sugar variant focuses on permissibility
                                                                                                                                                                                        • New advert emphasises compliance with PHE calorie targets
                                                                                                                                                                                          • ‘Shake it up’ campaign urges people to be adventurous
                                                                                                                                                                                            • Targeting students with Freshers’ Week sampling
                                                                                                                                                                                              • Vegan body urges consumers to ‘Ditch Dairy’
                                                                                                                                                                                                • Dairy industry steps up activity
                                                                                                                                                                                                  • Dairy UK and AHDB Dairy launch new generic marketing campaign
                                                                                                                                                                                                    • Dairy Council promotes health benefits with nutritionist-backed Milk Manifesto
                                                                                                                                                                                                      • Dairy farmers co-operate on ‘Februdairy’ social media campaign
                                                                                                                                                                                                        • Nielsen Ad Intel coverage
                                                                                                                                                                                                        • The Consumer – What You Need to Know

                                                                                                                                                                                                          • 96% of UK adults use milk
                                                                                                                                                                                                            • Most users would pay more than £1 for a four-pint bottle of milk
                                                                                                                                                                                                              • Niche retail availability limits uptake of ethical milks
                                                                                                                                                                                                                • Consumer interest in animal welfare does not always translate to buying
                                                                                                                                                                                                                  • Multiple barriers to drinking milk out of home
                                                                                                                                                                                                                  • Usage of Milk, Dairy Drinks and Cream

                                                                                                                                                                                                                    • 96% of UK adults use milk
                                                                                                                                                                                                                      • Need to persuade younger consumers of the merits of cow’s milk
                                                                                                                                                                                                                        • Figure 28: Usage of milk, by type, February 2018
                                                                                                                                                                                                                      • Under-35s are key users of plant-based milks
                                                                                                                                                                                                                        • Most plant-based milk users also use cow’s milk
                                                                                                                                                                                                                          • Semi-skimmed remains the most widely used milk type
                                                                                                                                                                                                                            • Figure 29: Usage of milk and milk drinks, by variety, February 2018
                                                                                                                                                                                                                          • Cream is used by half of UK adults
                                                                                                                                                                                                                            • Figure 30: Usage of cream, by type, February 2018
                                                                                                                                                                                                                        • How Much Consumers are Prepared to Pay for Milk

                                                                                                                                                                                                                          • Most users would pay more than £1 for a four-pint bottle of milk
                                                                                                                                                                                                                            • A quarter of users would pay more than £1.40
                                                                                                                                                                                                                                • Figure 31: How much consumers are prepared to pay for milk, February 2018
                                                                                                                                                                                                                            • Awareness and Usage of Added-Value Milks

                                                                                                                                                                                                                              • Retailers’ marketing push underpins reported usage of farmers’ fair pay milks…
                                                                                                                                                                                                                                • …but consumers’ high trust in supermarkets limits usage
                                                                                                                                                                                                                                  • Figure 32: Awareness and usage of added-value milks, by type, February 2018
                                                                                                                                                                                                                                • Reported usage of free-range milk contrasts niche retail availability
                                                                                                                                                                                                                                  • Consumers’ trust in regulators both boosts and hinders reported usage
                                                                                                                                                                                                                                    • Need to boost distribution and in-store visibility of ethical milks
                                                                                                                                                                                                                                    • Behaviours Relating to Milk, Dairy Drinks and Cream

                                                                                                                                                                                                                                      • Consumer interest in animal welfare does not always translate to buying
                                                                                                                                                                                                                                        • Figure 33: Behaviours relating to milk, dairy drinks and cream, February 2018
                                                                                                                                                                                                                                      • Need for high-welfare dairy producers to emphasise this more strongly on-pack
                                                                                                                                                                                                                                        • Perception of negative publicity adds further urgency
                                                                                                                                                                                                                                          • Cream loses out as consumers embrace varied meals repertoires
                                                                                                                                                                                                                                            • Social media can help to encourage cooking with cream
                                                                                                                                                                                                                                            • Attitudes towards Milk, Dairy Drinks and Cream

                                                                                                                                                                                                                                              • Multiple barriers to drinking white milk out of home
                                                                                                                                                                                                                                                • In-store positioning should help to encourage impulse purchases
                                                                                                                                                                                                                                                  • Figure 34: Attitudes towards milk, dairy drinks and cream, February 2018
                                                                                                                                                                                                                                                • Importance of iodine is acknowledged by many
                                                                                                                                                                                                                                                  • References by glass would help to make milk’s role as source of iodine more tangible
                                                                                                                                                                                                                                                    • Iodine’s role in maintaining brain function should help to boost milk’s appeal
                                                                                                                                                                                                                                                    • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                                                                                        • Abbreviations
                                                                                                                                                                                                                                                          • Consumer research methodology
                                                                                                                                                                                                                                                          • Appendix – Market Size and Forecast

                                                                                                                                                                                                                                                              • Figure 35: Best- and worst-case forecast of UK sales of milk, milk drinks and cream, by value, 2017-22
                                                                                                                                                                                                                                                              • Figure 36: Best- and worst-case forecast of UK sales of milk, milk drinks and cream, by volume, 2017-22
                                                                                                                                                                                                                                                              • Figure 37: Best- and worst-case forecast of UK sales of white milk, by value, 2017-22
                                                                                                                                                                                                                                                              • Figure 38: Best- and worst-case forecast of UK sales of white milk, by volume, 2017-22
                                                                                                                                                                                                                                                              • Figure 39: Best- and worst-case forecast of UK sales of cream, by value, 2017-22
                                                                                                                                                                                                                                                              • Figure 40: Best- and worst-case forecast of UK sales of cream, by volume, 2017-22
                                                                                                                                                                                                                                                              • Figure 41: Best- and worst-case forecast of UK sales of flavoured milk, by value, 2017-22
                                                                                                                                                                                                                                                              • Figure 42: Best- and worst-case forecast of UK sales of flavoured milk, by volume, 2017-22
                                                                                                                                                                                                                                                              • Figure 43: UK retail volume sales of milk, milk drinks and cream, 2012-22
                                                                                                                                                                                                                                                              • Figure 44: UK retail volume sales of white milk, 2012-22
                                                                                                                                                                                                                                                              • Figure 45: UK retail volume sales of cream, 2012-22
                                                                                                                                                                                                                                                              • Figure 46: UK retail volume sales of flavoured milk, 2012-22
                                                                                                                                                                                                                                                            • Forecast methodology