UK drinking milk market led by Dairy Crest Group

Press Release   •   Feb 22, 2013 11:57 GMT

The UK drinking milk market experience growth of 2% in current value terms through 2012, to reach a sales value of £4,082 million.

Both fortified/functional reduced-fat milk and goat milk continued to be popular choices in 2012; expected to post volume growth of 5% and 3% respectively.

Despite remaining a niche category, soy milk continued to perform quite well, and is expected to increase by 1% in volume terms in 2012. These varieties offer health benefits, which consumers are increasingly demanding from their food and drink.

The dairy industry has been under pressure for a generation, as the statistics so vividly illustrate. In 1995 there were 28,000 dairy farmers. Last year there were just over 11,000.

Over the same period the average herd size has more than doubled as the less efficient holdings were forced out of the business. Meanwhile, the price of a pint of milk (or, more likely, four) has tumbled.

Milk is the ideal supermarket commodity: an everyday essential with a short life span. Cut its price and it's sure to bring in the shoppers. Market fundamentalists would cheer at the benign effects of competition, and as food takes an ever larger share of the daily budget, while charities report that the demand for food handouts is reaching a new high each week, it might seem contrary to quibble.

Dairy Crest Group is expected to continue to be the leading branded manufacturer in the United Kingdom drinking milk products market in 2012, with a value share of 7%. Its key brands, Country Life and Frijj, are the most important contributors to the company's performance.

The company aims to make Frijj a £100 million brand by 2017 through organic growth and new product developments, but it will also consider more brand extensions.

The latter proved successful in 2011, when a Frijj brand extension, the Incredible sub-range, was launched in mid- 2011, contributing over £4 million in sales, equating to 9% of total sales of Frijj by the end of 2011.

The UK drinking milk market is expected to see continued price competition as companies vie for shelf-space against private label products. Brands will need to be competitive in terms of pricing, innovative packaging and differentiated product detail.

For more information on the UK drinking milk market, see the latest research: UK Drinking Milk Market

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