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Executive Summary

Table of Contents

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EXECUTIVE SUMMARY

The market for milk and dairy products operates within the context of the food industry. The main sectors are liquid milk, cheese, yoghurt and chilled desserts, yellow fats and cream. The market grew by just 6.1 percent between 1994 and 1999, to reach an estimated value of £7.1bn. This represents a decline in the market's penetration of total food sales.
Liquid milk accounts for the largest proportion of sales. Semi-skimmed is the major product type, having taken over from full-fat milk as consumers try to reduce their fat intake. The longlife product, ultra-heat treated (UHT) milk, is gaining popularity, although the development of longer-life fresh milk is expected to meet with some success.
The next largest sector is cheese. It has benefited from the increasing sophistication of consumer taste, with sales of the more expensive, quality products growing ahead of the standard types. Stronger cheeses are now more popular among some sectors of the population. Lower-fat cheeses are a successful niche.
Yoghurt and chilled desserts is the most dynamic sector, with sales rising by 13.9 percent between 1994 and 1999. Products are highly suitable for today's eating habits, being both instant and suitable for solo consumption. Yoghurt is the largest segment, suppliers having successfully tailored the product's appeal to all levels, from indulgence to low fat. The chilled desserts segment was galvanised by the introduction of confectionery brands in the mid-1990s and this continues to provide inspiration for new products.
Sales of yellow fats have achieved limited growth in recent years. With the emphasis on flavour and health, many new product launches and reformulations in the late 1990s focused on providing a more buttery taste. Spreadable butters were also brought to the market, but owing to their
non-dairy content had to be classified as spreads, although Kerrygold launched a 100 percent natural spreading butter late in 1999. Spreads and margarines, which cover a wide range of products and fat types, account for the highest share of sales.
Cream sales have risen in value, reflecting the introduction of more
added-value products. Flavoured creams and aerosol products provide greater convenience, but face strong competition, particularly from the dessert accompaniments market.
Consumer research shows that all categories of milk and dairy products have a high level of consumer penetration, although this is declining slightly in some cases. Successful product development will focus on adding value and convenience. Taste and health appeal will also be of key importance.
Key Note forecasts slow growth to 2004 as larger areas of the market continue to mature. At current prices, market value is forecast to increase by 9.5 percent between 2000 and 2004, to reach £7.93bn. In real terms, this represents a slight decline in sales.

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TABLE OF CONTENTS

Executive Summary

Market Definition

INTRODUCTION

MARKET SECTORS

MARKET POSITION

MARKET TRENDS

Table 1: The UK Market for Milk and Dairy Products by Sector by Value (£m at rsp and percent), 1999

Table 2: Index of Consumer Expenditure on Milk and Dairy Products and on All Food at Current Prices (index 1994=100 and percent), 1994-1999

Market Size

THE TOTAL MARKET

BY MARKET SECTOR

FOREIGN TRADE

Table 3: Sales of Milk and Dairy Products at Current Prices (£m at rsp and index 1994=100), 1994-1999

Table 4: Sales of Liquid Milk at Current Prices (£m at rsp and index 1994=100), 1994-1999

Table 5: Sales of Liquid Milk by Type by Volume ( percent), 1999

Table 6: Sales of Cheese at Current Prices (£m at rsp and index 1994=100), 1994-1999

Table 7: Sales of Cheese by Type by Value (£m at rsp and percent), 1999

Table 8: Sales of Yoghurt and Chilled Desserts at Current Prices (£m at rsp and index 1994=100), 1994-1999

Table 9: Sales of Yoghurt and Chilled Desserts by Type by Value (£m at rsp and percent), 1999

Table 10: Sales of Yellow Fats at Current Prices (£m at rsp and index 1994=100), 1994-1999

Table 11: Sales of Yellow Fats by Type by Value (£m at rsp and percent), 1999

Table 12: Sales of Cream at Current Prices (£m at rsp and index 1994=100), 1994-1999

Table 13: Sales of Cream by Type by Value (£m at rsp and percent), 1999

Table 14: Exports of Milk and Dairy Products By Value (£m), 1997 and 1998

Table 15: Imports of Milk and Dairy Products by Value (£m), 1997 and 1998

Industry Background

RECENT HISTORY

INDUSTRY CONCENTRATION

DISTRIBUTION

TRADE ASSOCIATIONS

Table 16: The Number of VAT-Based Manufacturers of Dairy Products by Turnover, 1999

Table 17: Distribution of Milk by Channel by Volume ( percent), 1996, 1998 and 1999

Competitor Analysis

THE MARKETPLACE

MARKET LEADERS

ADVERTISING AND PROMOTION

Table 18: Major Suppliers to the Milk and Dairy Products Market by Turnover (£m), 1998/1999

Table 19: Main Media Advertising Expenditure on Milk and Dairy Products (£000), Year Ending September 1998 and 1999

Strengths, Weaknesses, Opportunities and Threats (SWOT)

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

Buying Behaviour

GENERAL TRENDS

PURCHASING PATTERNS

Table 20: Penetration of Milk and Dairy Products ( percent of housewives), 1993-1999

Table 21: Penetration of Milk and Dairy Products by Age ( percent of housewives), 1999

Table 22: Penetration of Milk and Dairy Products by Social Grade ( percent of housewives), 1999

Outside Suppliers to the Industry

RAW MILK AND OTHER FOOD INGREDIENTS

PACKAGING

PROCESSING EQUIPMENT

Current Issues

SUCCESSORS TO MILK MARQUE

NATIONAL DAIRY COUNCIL MOVE TO GENERIC PROMOTIONS

COMPANY DEVELOPMENTS

EXTENDED-LIFE MILK

Forecasts

DEMOGRAPHICS

SECTOR TRENDS

PRODUCT DEVELOPMENT

COMPETITOR FORECASTS

FORECASTS 2000 TO 2004

Table 23: Age Profile of the UK Population (000), 1996 and 2006

Table 24: Forecast Sales of Milk and Dairy Products at Current Prices (£m at rsp), 2000-2004

Company Profiles

INTRODUCTION

DEFINITIONS

FURTHER INFORMATION

Further Sources

ASSOCIATIONS

PERIODICALS

DIRECTORIES

GENERAL SOURCES

HOPPENSTEDT BONNIER INFORMATION SOURCES

GOVERNMENT PUBLICATIONS

OTHER SOURCES

Text © 1999 Key Note

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