From Yoghurts to Cheeses, Healthier Choices are Leading to More Consumers Looking into the Dairy Fixture for Top-Up Meals as well as Cooking Alternative. Asian Trader Looks at What’s Hot in Chilled
With food formats becoming more varied, consumers wanting more fresh food and an increase in on-the-go consumption, it is safe to say that the Dairy category is more important than ever for convenience retailers.
Regular chats with leading convenience and independent retailers has revealed that the chilled aisle, and in particular the dairy fixture, is currently bigger in measurement, scope and sales than it ever has been.
Worth just under £820m in total convenience and just under £160m in symbols and independent grocers, the Dairy category has buffered a challenging year quite well.
Impacted by deflation, household penetration has nonetheless remained buoyant, with 48% of UK households purchasing in the convenience channel, and more than one in five now doing so through symbol and independent grocers, a figure that is up +7% year on year (Kantar).
With a multitude of sub-sectors, Dairy is a vibrant and diverse category with plenty of innovation that retailers must keep abreast of.
The Cheese category is worth almost £79m in Symbol & Independent Grocers (IRI), with cheddar dominating at 56% in volume and 53% in value. The category has had a challenging year, with price deflation driving increased volume and influx of over 330k new households buying, but at the expense of category value.
Block, which remains the predominant cheddar format and a staple of the fresh top-up shop (contributing 80% of cheddar sales) has experienced the most significant price deflation, which has impacted on the overall health of the category.
Formats catering to consumer demand for convenient meal preparation have meanwhile demonstrated good growth (Sliced Cheddar +20%, Grated Cheddar+19% and Cheese Spreads +2.3%).
Star performer in the Convenience Cheese market is snacking, notably cheddar snacks, which have driven volume growth of over 25% in the latest year, driven both by movement away from the traditional three meals a day, as well as consumer desire for portion control.
Cathedral City, worth £260m in total grocery and bought by almost six in ten UK households, has maintained its status as market leader.
Cathedral City Block remains at the heart of the Cathedral City portfolio, contributing three of the top five selling SKUs in the total cheese market (Kantar).
In symbols and independents Cathedral City Mature 200g block is the leading block cheese SKU by value, while Cathedral City 350g ranks third.
“Offering a credible range of products for easy meal preparation has become increasingly important, driven by the needs of today’s time-starved consumers. Cathedral City Sliced, Grated and Spreadable ranges are all significantly outperforming the market in their respective sectors in symbols and independents and should therefore feature high on c-store retailers’ consideration sets,” Will Hemmings, Head of Cheese, Dairy Crest UK.
In 2016, Cathedral City invested heavily in a full relaunch that included an identity and packaging refresh spanning the entire product portfolio. It was supported by a £4m marketing campaign, including TV advertising, shopper marketing, PR and social media.
Currently, Cathedral City convenient formats are outperforming the market with Cathedral City Sliced & grated showing year-on-year growth of +42.2% and +11% respectively in value. Cathedral City Spreadable has also driven good growth in Cheese Spreads (+29.7% val) against overall Spreads sector decline, boosted by the launch of two new flavour variants – Extra Mature and Garlic & Herb in 2016.
The brand’s most recent launch is the Cathedral City Snack Bar, launched into the convenience market in November 2016. The individually wrapped 30g cheese portions are designed to tap into the growing trend for savoury snacking amid consumer backlash against sugar. To amplify this launch, the Snack Bar will continue to be supported with marketing support throughout 2017.
Mondelēz International is one of the leading snacking cheese manufacturers, with a 45% (Nielsen) share of the total market. The company has a presence in all the snacking cheese subcategories including processed cheese, spreads and slices, on-the-go cheese snacks, plus soft white cheese.
Dairylea is the UK’s number one Snacking Cheese brand and is helping to drive the category, with a growth rate of 9% (Nielsen). Dairylea’s portfolio includes products which are ideal for parents for on-the-go, lunchbox and after school snacking occasions.
Within lunch combinations, the Dairylea Lunchables brand is showing an impressive growth rate 25 per cent (Nielsen).
“We have seen large growth in the cheese snacks segment which is closely aligned to Mums looking for convenient solutions for kids’ snacking. Dairylea offers a great range for mums who want a snack for kid and continues to bring innovation to the category,” says Susan Nash, trade communications manager at Mondelēz International
The brand continues to bring innovative new products to the category and introduced Lunchables Pepperoni Pizza in 2016. Dairylea also returned to television in 2016 for the first time in three years.
Mondelēz International’s other standout brand is Philadelphia, a leader in the soft white cheese sector. The brand is currently partnering with Lorraine Pascale to inspire consumers with a range of weekday dinner recipes that promise to be ‘tasty and easy to make’. The campaign will run until May, including TV, digital, social and print media plus in-store activation.
Yogurts & Desserts
As consumers’ lifestyles get more and more hectic, they are increasingly relying on the convenience channel to cater to their meal and snacking needs, and the Chilled Yogurts and Potted Desserts sector is no exception. Within Convenience, the category is worth £249million (Kantar), and with the correct range retailers have a real opportunity to grow this even further.
There is an increasing desire for healthy choices especially among millennial shoppers. With this in mind, Danone Dairies’ recently launched Light & Free. This is the latest addition to Danone Dairies’ portfolio and a market-first: a double-zero yogurt with zero fat and zero added sugar, containing only naturally occurring sugar.
According to Kantar, shoppers are not only switching to natural yogurts for their on-the-go choices, but also in cooking, as an alternative to cream or butter.
Onken Natural Set, which has a thicker consistency for cooking, says it has experienced a surge in demand as consumers are becoming more creative in the kitchen.
With one in every 10 yogurt buyers purchasing Onken in the convenience sector (Kantar) and a third of these making repeat purchases, the Onken brand is a leader within this channel.
The brand has identified key sales spikes around cultural celebrations, such as Ramadan and Diwali. Sales of its Naturals range surge each year during these periods, with it being an ingredient that can be used in traditional dishes for observers.
The brand plans marketing strategies to reflects this, for example, during Ramadan and Diwali last year, Onken created a content film to promote the use of Onken Natural yogurt in a variety of ethnic recipes.
This year, the brand ran a social media contest for consumers to vote for the next limited edition product, with the winning flavour, Summer Lemon, due to land on shelves in summer this year.
Yoplait, part of the General Mills group, is investing £3m in the Liberte brand over the next six months and is now launching yogurt pouches under the Liberté brand in a category first for adult chilled yogurt formats.
Liberte Pouches will be supported with a consumer sampling campaign targeting more than 250,000 samples across the next few months through high street, event and offices to reach consumers in the on-the-go occasion.
The products will soon be available in Spar and Nisa and come in 130g portions in Blueberry and Raspberry fruit flavours. Liberté yogurt is made from 100% naturally sourced ingredients, rich in protein with a thick, rich texture and contains 0% fat. The product is similar in taste and texture to Greek yogurt, which is the strongest growth segment in the category, enjoying an increase of 15% in value sales versus last year (IRI).
The flavoured milk market is currently worth over £304 million (IRI), with chocolate milk still the category’s favourite flavour with a 30% share, followed by fruit (24%). The specialised flavoured milk segment has a 23% category share, and continues to show growth of 7% (IRI).
Nurishment, the UK’s leading nutritionally enriched milk drink (IRI), aims to provide consumers with pep to get through the day, and to that end includes vitamins, minerals, calcium, and as much as 20g of protein per pack.
“Flavoured milk shoppers have become more discerning when it comes to their choice of functional drinks,” says Nyree Chambers, Head of Marketing for Grace Foods UK, suppliers of Nurishment.
“Taste and flavour remain important, but they want these drinks to do much more than quench thirst. They’re looking to them to help fuel their busy lifestyles and provide much-needed nutrition which keeps them on the go.
“Dairy drinks such as Nurishment, which also acts as ‘gap-filler’ in a convenient format, are ideal for consumers who lead busy lifestyles, or who are simply looking for added nutrients in a convenient, tasty format, and as such represent a major profit opportunity for retailers.”
Nurishment is available in a number of convenience formats. Nurishment Original, as the name suggests, was the first SKU in the range and is known by consumers.
Meanwhile, new-look Nurishment Extra is specifically formulated to give a lighter taste, with the ‘added sugar’ level reduced by up to 50%, and comes in a resealable bottle.
Containing 14 different vitamins and minerals, Nurishment Extra is available in four flavours in outers of 12, with an RRP of £1.09p.
The chocolate milk drinks range from Mars Chocolate Drinks and Treats continues to outperform the category and is worth £24.2 million (IRI).
Mars Milk also remains a bestseller, accounting for 69% of all Mars chocolate milk drink sales (IRI).
Within the specialised flavoured milk segment, Mars Chocolate Drinks and Treats has a High Protein milk drink. The Mars High Protein milk drink contains 22g of protein and retails at £2.00.
With PMPs so important in the convenience sector, Mars Chocolate Drinks and Treats has recently moved its must stock 8x350ml milk drinks range into PMP.
The full range of PMP includes some of the nation’s favourite confectionery brands, including Mars, Galaxy, Milky Way and Bounty. Joining the range this year is the new Maltesers variant with an RRP of £1.29.
The 702ml Mars Milk bottle is also now available as a PMP to offer shoppers even more value for money, with an RRP of £1.69.
Michelle Frost, General Manager for Mars Chocolate Drinks and Treats, said: “Our 350ml milk drinks range is a huge category driver. By moving into price marked packs, we hope to see even more category growth by offering retailers the opportunity for more impulse purchases.”