Grass Fed Cows - A Market Opportunity?

Today's headlines announce that a recent study has found organic milk to be healthier than conventionally produced. Dig a bit deeper and we find that's not what the study found at all.
The study was carried out by Newcastle University, and published yesterday in the Journal of the Science of Food and Agriculture. It compared nutritional content of milk from three production systems - low input organic, low input non organic, and high input conventional.
And here's the interesting bit. During the outdoor grazing period milk from low input non organic systems were just as rich in good essential fats and antioxidants as organic. Both were much richer than conventional high input milk. When the cows were housed, there was little difference in nutritional composition between high input and organic.
The increased fats and antioxidants cited in the study include Omega 3, Vitamins A and E, and conjugated linoleic acid which has been found to shrink cancerous tumours. Consumers are likely to feel that milk which contains more of them is a better buy.
The study shows that the difference between the two low input systems and the high input is the amount of fresh grass grazed, with an average high input cow having just 37% of her food from fresh grass compared with around 80% for the low input animal.
Of course in our sound bite society few journalists are going to delve into the detail of a heavyweight journal article, and uncover the facts that low input non organic is just as good as organic, and that the extra richness disappears from organic during the winter period. Hence the easy headlines that organic is better.
Nevertheless, the findings are significant for the dairy industry. At last there seems to be an opportunity to divide liquid milk into another market sector rather than just talk about organic and conventional. It is not too difficult to see an added value milk on shop shelves with a selling point about being from grass fed cows and therefore naturally higher in health benefits.

Cloned Food

I'm surprised there's been so little fuss in the UK about cloned food.

On 11th January the European Food Standards Authority (Efsa) announced its conclusion that products from cloned pigs and cattle are unlikely to be a threat to food safety or the environment but that products should be labelled as cloned. It admitted that cloning has significant animal health and welfare issues. It was silent on the ethics of cloning. Comments from the public are requested by 25th February.

The next day the European Group on Ethics in Science and New Technology, reporting to the European Commission said "considering the level of suffering and health problems (to animals) EGE has doubts as to whether cloning animals is ethically justified". It went on to say that it does not see convincing arguments to justify the production of food from clones and their offspring.

But where is the outcry to get cloning stopped? Yes, the Soil Association, RSPCA, Compassion in World Farming and Friends of the Earth have spoken out against the practice, the media have reported the factual news, and supermarkets has said that they will not sell cloned products.To date though, there have been no questions raised in Parliament, no newspaper editorials providing a view, no surveys done among the public to see what they feel about the issue. The NFU say they will be guided by the science, which sidesteps the ethics, and see no need for labelling. Major food processors do not appear to have commented.


Contrast this with what has happened in America where the FDA announcement on 14th January that food from cloned cattle, pigs and goats is safe to sell into the food chain has caused outrage. The ruling was made in the teeth of four years of furious opposition from consumers, around 60% of whom have consistently said in research polls that they oppose cloned food on ethical and safety grounds, and from Congress for reasons of ethics and lack of robust data. Fury has been heightened by the decision not to require specific labelling, leaving the public with no idea whether they are eating cloned food or not. Big food processors and retailers have declared that they will not sell cloned foods. Even the NFU has said that if cloned food is to be sold then it needs to be labelled saying "consumers have a right to know if their food comes from cloned animals". The continued outcry has had an effect. The US Department of Agriculture has asked for the moratorium on cloned food sales to be continued to "allow sufficient time to prepare so that a smooth and seamless transition can occur". Which has been translated as buying time so that consumers can be educated.


It all raises the question of how on earth cloning animals for food has got as far as it has in the US. Clearly there are issues of ethics, unease, and compassion, meaning that consumers don't want to buy the products, food companies don't want to process them, and retailers don't want to sell them.

Getting back to the UK, why is it all so quiet here? Perhaps an announcement from Europe does not have the same impact as one from here at home. Perhaps people think it will never happen. Perhaps a short news report in the brain dead days just after Xmas isn't sufficient to raise awareness.Hopefully its just that it's early days in the process, and when the penny drops the UK public will spring into action with widespread and spirited campaigning. It worked on GM foods.

Trendspotting 2008

As economic gloom rises, access to cheap credit evaporates, nervousness sets in about spending the money we've got, and rising food costs have registered even on the affluent, it is timely to ask whether a hunt for lowest possible food prices is set to obliterate any other considerations in consumers' minds. Applying some tried and tested lessons about consumer behaviour when the going gets tougher may help answer the question. So, somewhat bravely, here are predictions about food market trends in 2008.

Value not price

At times of economic pressure people search harder for value, which is different from just looking at sticker price. Value is a combination of price, quality, and feeling good about a purchase. Its perhaps best summed up as answering yes to the question "is this worth it?". Top quality, fairly priced products will continue to sell well. Anything seen as pricey for what it is will not, and supermarket top tier product staples such as meat, fruit, veg and dairy may struggle unless they are clearly better than alternatives.

Environmental concern

This is here to stay largely due to the high level of publicity it receives. Products and services seen to be beneficial to the environment will continue to see sales growth.

Provenance/Ethical purchasing/Health

These trends have been combined as they are closely related in consumers' minds. Provenance may be described as "can I trust the source of this food and how it got here". The link with health comes because consumers are worried for health reasons about what goes into their food and how it is processed. They worry for ethical reasons about where it has come from and how far, how the animals have been treated, and have the producers been fairly rewarded. All these concerns have combined to power sales of local food, organics, fair trade, and special animal welfare schemes, even though the sticker price is usually higher than for other options. The forecast for all these sectors is continued growth, albeit at a lower rate than historically. Those who are truly committed will not change buying habits, but occasional purchasers if pushed for cash may buy less often.

Channels of purchase

The places people buy from and the way they buy are also likely to change. People drawing in their purchasing horns may choose to eat out less, or trade down in the amount they are spending on a night out. So sales through catering channels will slow or even decline. One channel which could grow is internet grocery shopping which saves petrol costs, and food miles, and is more convenient.

So in the end....

Though conditions may be tough, and overall growth may slow, there is unlikely to be a major reverse in the encouraging trend towards consumers caring more about their food, and being prepared to pay that bit extra for top quality, fairly priced products that help them live lives that they can feel good about.

Healthy, Natural and Branded Means Growth in Dairy Products

The Grocer magazine has just published its annual look at what's hot and what's not in the grocery trade. The piece on dairy products shows a trend towards healthy, natural products with brands by and large doing better than own label. Here are a few facts and figures.

Butter and Spreads

Lurpak butter is now the biggest brand having overtaken Flora. Anchor and Kerrygold have also boomed. Sadly none of these big growth brands is British which should be a source of great shame to British owned companies. At least Country Life from Dairy Crest is having a go with the introduction of Spreadable, but overall its sales are flat. On a much smaller scale, Yeo Valley have also increased sales.

Cheese

Dairy Crest do redeem themselves somewhat in the cheese market, with Cathedral City far and away the biggest brand, helped by the launch of a 30% less fat version. Somerset based Wyke Farms is also doing well, with a turnover of £21m, up 37% in sales since last year, as is Seriously Strong from Scottish Lactalis McLelland (£52m). This shows that smaller private businesses can succeed in the dairy market providing they have strong local brands. Once again its the pure products which are doing best with processed cheeses like Dairylea and Philadelphia struggling for sales. It would be good to see more brands from the milk coops, and to be fair Lake District cheese has been launched by First Milk and Tickler by Milk Link. However, there are many brands in this market and it may be difficult for the coops to see a financial return unless they come up with something genuinely new and different.

The cheese market is one where branded products are growing faster than own label with the total category up 2% and own label up less that 1%.

Milk

It used to be said that milk is a commodity and can't be branded. But Cravendale (sales £93m), Yeo Valley Organic Milk (sales £12.5m) and St.Helen's Milk from its namesake farm (sales £10m) are all proving this wrong. Flavoured milk sales are growing by 8%. Total milk sales are up 7% and own label up 5%.

Yogurts

Yoghurt sales continue to grow, again with brands outstripping own label. Muller is still the leader but Activia with its "healthy gut" message is now second with sales of £117m. An amazing success story and evidence of consumers worries about healthy eating. Its in this sector that organic sales are strongest, led by Yeo Valley and Rachel's with combined turnover of nearly £100m, or 6% of the total market.

Brands

One other branding thought is the way a brand name can be stretched across a number of different sectors as long as the basic message is relevant to all of them. Yeo Valley now has products in butter, milk, and yogurt. Rachels Organic has launched yoghurt drinks alongside its standard product. Flora does yoghurt drinks as well as spread. The benefit of course is that advertising and promotional money is spread across a number of items, and becomes more economical.

More info required?

If you need more figures please contact me via the comments section.

Food and Health - the consumer votes with their purse

News has just come in from TNS, the firm which monitors consumer sales. Far from shunning bacon as recommended by the World Cancer Research Fund, sales of bacon in the week the report was published were up by 4%. British consumers are showing their usual good sense, and choosing a balanced diet.

Food and Health - confusion reigns

Last week the advice for avoiding cancer was to be thin, according to a study published by the World Cancer Research fund, and the American Institute for cancer research.This week the Centres for Disease Protection and Control Atlanta, in a paper published in the respected Journal of the American Medical Association, tell us that there is no correlation between carrying a few extra pounds (stress few, obese is not good), and cancer risk. Last week's study said the target Body Mass Index to aim for is 25, this week's says up to 30 is ok. Indeed the evidence here is that a bit of a bulge means a longer life. Hmmm.



As far as red meat eating and avoiding bacon butties like the plague is concerned, the Sun (about 3 million readers) comes out today in favour of a middle ground approach. It quotes Karol Sikora, professor of cancer Medicine at Imperial College School of Medicine and advisor to the World Health Organisation stressing that the risks of moderate meat eating are "very, very low". Even the head of the World Cancer Research Fund, Martin Wiseman, is back-pedalling on the bacon issue, saying "its not a question of all or nothing", and if you eat two bacon sandwiches a day now, then aim for one.



Looks like common sense and Granny's maxim of everything in moderation will win the day.