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?

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