More brands add dairy-free options
Sustainability is a key focus for the dairy sector and last year saw the continued drive to make improvements by all the big brands.
Arla, in position 17 with a growth of 10% published its Future26 strategy towards the end of last year pledging investment to both its own sustainability and to supporting its farmers. With a 100% market penetration, dairy products have remained an essential fridge item throughout the pandemic whether that’s traditional dairy or the ever-expanding range of alternatives.
The additional in-home occasions during COVID-19 led to a spike in sales growth in dairy drinks and CYPD (chilled yoghurts and potted desserts). Growing against such high 2020 figures is therefore challenging and dairy has seen a decrease in sales of 1.4% in the latest period when compared to this time last year. This has primarily been driven by diminishing volumes per trip (-8%) and increased average price (+5.5%), much like trends seen throughout most grocery categories.
Whilst dairy is in slight decline overall, some areas have performed better than others. The flavoured milk and yoghurt drinks categories witnessed strong year-on-year value growth. Yeo Valley in position 6 capitalised on this by entering the flavoured milks market with organic chocolate and raspberry drinks. The range is HFSS compliant and set to provide a “permissible treat” for health-conscious consumers. Many more brands have been taking dairy-free products to market as this was the highest growing sub-sector versus last year. Yoplait, in position 9 launched its first plant-based product in July 2021, the vegan Petit Filous were created inresponse to families seeking dairy-free alternatives.
Dairy e-commerce sales, as with many other sectors in grocery, has seenrecord share growth from 8.3% pre-pandemic to 14.5% by the end of2021. The online channel still represents a small proportion of salesfor total dairy, relative to brick-and-mortar stores, but nevertheless haswitnessed impressive growth, driven through new shoppers enteringthis channel and retaining these habits.
We are starting to see this change reflected in brand strategy as shoppers will often order larger pack sizes when it’s going to be delivered. An example of this is Actimel in position 12 which has moved towards larger 12 packs from their typical eight packs and increased their sales as a direct result of this.
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Functional yoghurt drinks gained a 17% share this year, due to health concerns raised throughout the pandemic.
As a result of these concerns, consumers bought more probiotic products such as Actimel Immune Support, which has increased sales by more than 50% since 2019. Capitalising on the idea of preventative health, Actimel grew by +15.4% this year, primarily driven by new shoppers and people buying it more frequently, as people turned to the trusted brand in times of uncertainty.
