As the milk fridge sees price competition intensify, fast-growing milk drinks provide profit options
MILK is an everyday purchase for many households and a product that is used every day in most homes. In recent times the price of mainstream milk has come under severe pressure, which, of course, threatens the profitability of milk sales. So what can be done to avoid a situation where milk becomes a simple commodity where price is effectively the only consumer consideration?
Well, extending the milk range can be very important, as can the suggestion of new uses for a wide variety of milk products. Both techniques can encourage consumers to buy a wider variety of types of milk and milk drink, in different sizes, at a variety of times of the day, for a variety of reasons.
For example, while some types of organic produce have taken a serious sales hit during the recession, milk is one organic line that has held up pretty well and supplying organic milk (especially organic semi-skimmed milk) could be commercially beneficial for stores with the type of customer to whom such production methods are important.
And single-serve sizes of milk could be very useful to stores near schools and or those for whom food to go and meal deals are important. There’s some evidence that semi-skimmed and skimmed milk in drink-now sizes are popular lunch time buys for those female consumers who are interested in grabbing some protein and calcium with relatively low fat and calorie counts.
Milk drinks can also figure in food-to-go fridges. Once again, stores near schools might draw particular benefit from flavoured milks and milk shake drinks, although at least one manufacturer notes that milk shakes can also be very popular with pensioners.
Britain’s parents are spending £2bn a year on packed lunches for children, says FrieslandCampina, brand owner of Yazoo, a flavoured-milk range available in chocolate, strawberry and banana in 200ml, 475ml and one-litre sizes.
And while mainstream milk is seeing volume sales increase while sales value drops the flavoured milks seem to be faring better – though volume is still rising faster than value, which suggests that there is still pressure on price.
Over 2.7m households purchased Yazoo in the past year, the firm said and sales grew 8.6% in value and 11.7% in volume year on year.
Quoting Kantar Worldpanel FrieslandCampina said flavoured milk for on-the-go consumption was also up and didn’t show the same price pressure – value was up 13.0% year on year with volume up 5.7%.
• Wiseman’s Shock is a range of flavoured milks (chocolate, banana and strawberry) formulated to meet all healthy guidelines for schools. Parents can be assured that there are no artificial flavours and preservatives.
Sandy Wilkie, sales and marketing director for Müller Wiseman Dairies, said: “Parents want to look beyond soft drinks and waters to give their children that extra supplement or health benefit. Milk has a natural vitamin and mineral content which can help satisfy their needs.
“The 250ml is an ideal size for lunchboxes which allows us to provide a range of dynamic products for our retailers. The size also encourages dual-siting, allowing the products to sit in the soft drinks fixture.”
Dairy Crest chief executive officer Mark Allen singled out the group’s flavoured milk range Frijj as a product line which is currently doing well but also shows strong potential when the group’s year-end results were announced earlier this year.
“ [It has} … a great position in the flavoured milk market. It’s about half the fresh flavoured milk market and about a quarter of the overall market.
“We think the brand has real good credentials to grow, particularly as we develop the UHT format,” he said.
Frijj has two ranges. Its Original collection includes vanilla, chocolate, banana, strawberry and fudge brownie, while the Incredible range includes indulgent flavours like sticky toffee pudding and caramel latte.
Growing interest in milk as an aid to sports recovery presents a profit opportunity for retailers, according to Enco Products, the firm behind nutritionally enriched milk drink Nurishment.
The firm has taken the Nurishment brand into what it sees as a new, growing market sector with Nurishment Active, an enriched milk drink specially formulated to help the body recover after exercise.
“The soft drinks market is evolving, with interest in sporting activity at a high and consumers now seeking innovative, functional products which are specifically formulated to aid their performance,” said Nyree Chambers, head of marketing for Enco Products.
“There is growing interest in the use of milk as a rehydration solution as it’s a natural provider of water, sugar and electrolytes. This has led to the development of innovative enriched milk drinks such as Nurishment Active, where vitamins, minerals and protein are added to milk to create the ideal sports recovery product.”