FREE-UK-Flavoured-Milk-Report-2016-2017
The backdrop to the UK flavoured milk market is one of relentless change. The removal of the EU milk quotas, the transition to a Western-type diet by emerging economies, the UK sugar debate and the booming sports nutrition industry are all aspects of change that create both challenges and opportunities for the UK flavoured milk market. HRA Food and Drink Marketing has developed this report as a map to guide industry stakeholders. Although volume growth in 2014 was slightly lower than in previous years, the flavoured milk market still has plenty of room for product innovation and development. Overall, we expect the UK flavoured milk market to continue to grow over the medium term, but not without improving its nutritional profile. The sugar debate reached new heights when, in October 2015, Public Health England released a document suggesting Government intervention in the form of a sugar tax (levy). As a consequence, product reformulation has become a priority for all serious players in the market.
The backdrop to the UK flavoured milk market is one of relentless change. The removal of the EU milk quotas, the transition to a Western-type diet by emerging economies, the UK sugar debate and the booming sports nutrition industry are all aspects of change that create both challenges and
opportunities for the UK flavoured milk market.
HRA Food and Drink Marketing has developed this report as a map to guide industry stakeholders. Although volume growth in 2014 was slightly lower than in previous years, the flavoured milk market still has plenty of room for product innovation and development.
Overall, we expect the UK flavoured milk market to continue to grow over the medium term, but not without improving its nutritional profile. The sugar debate reached new heights when, in October 2015, Public Health England released a document suggesting Government intervention in the form of a sugar tax (levy). As a consequence, product reformulation has become a priority for all serious players in the market.
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<strong>UK</strong>#FLAVOURED#MILK#<strong>2016</strong>217#<br />
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As parts of the sub category mature the proliferation of own label is more<br />
likely. At the present evolution in the market, brands have a clear ‘breathing<br />
space’ before significant amounts of own label propositions emerge. Image<br />
and appeal is important to consumers in the category and brands appeal to<br />
this aesthetic more. There are clearly some sub-categories that are more<br />
impervious to own label e.g. added value, protein, functional milk. Other<br />
areas such as traditional flavoured milk are more open to own label<br />
propositions.<br />
2.7 Retail Own Label Ranges<br />
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The <strong>UK</strong>'s main retailers (Tesco, Sainsbury's, ASDA, Morrisons, Waitrose &<br />
Co-op) all offer their own flavoured milk formulas at more competitive<br />
price point than branded offerings.<br />
Own-label flavoured milk shares broadly follow the share that retailers<br />
have of total grocery i.e. the Tesco own-label flavoured milk category is<br />
worth more than own-label in the other retailers. As the category<br />
matures, there is a tendency for this effect to become more pronounced.<br />
Sainsbury's flavoured milk offering has remained constant in the past<br />
three years and the same can be said for ASDA and Morrisons.<br />
Tesco has seen a slight increase in the volume of SKUs over the past<br />
three years.<br />
2.8 Issues Faced by Own Label<br />
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In standard flavoured milk especially, brand discounting (e.g. multi buy<br />
offers, X for Y, two for one, BOGOF etc.) often means the brands sell at a<br />
price below own-label.<br />
The lack of <strong>UK</strong> based co packing capacity in the market is a significant<br />
issue preventing the proliferation of own label UHT products in particular.<br />
2.9 Own Label in Sub-Categories<br />
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Own-label flavoured milk is mostly in the traditional flavoured milk subcategory,<br />
though there is growing own-label presence in confectionary<br />
and coffee flavoured milk.<br />
Sainsbury’s for example has ventured into the confectionary sub-category<br />
with their Belgian Double Chocolate own-label flavoured milk. All the<br />
main retailers have also developed their own coffee drink products.<br />
There is minimal own-label presence in the other sub-categories including<br />
breakfast drinks and sports nutrition.<br />
This allows brands to dominate in these sub-categories and carry<br />
relatively high price points.<br />
As breakfast drinks are a relatively new sub-category, supermarkets have<br />
not yet entered with their own products. If the sub-category continues to<br />
grow, it is likely we will see own-label products in the next few years.<br />
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