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Milk & Dairy Products Market Report 2009
Key Note Publications Ltd, July 2009, Pages: 107
This report examines the UK market for milk and dairy products, which is broken down into the following sectors: liquid milk; cheese; yogurts, yogurt drinks and chilled desserts; yellow fats; and cream. The value of the milk and dairy products market rose strongly from 2004 and was worth £8.43bn by 2008 (at retail selling prices [rsp]).
The liquid milk sector is dominated by retailer own-label products. However, suppliers have had some success with the introduction of their own brands, such as Cravendale and Lactofree from Arla. In addition, interest in regional suppliers and food miles has developed the market for locally sourced milk.
Cheese sales rose strongly as consumers continued to develop a taste for stronger and more diverse flavours. The development of more convenient formats and reduced-fat recipes has also been well received.
The market for yogurts, yogurt drinks and chilled desserts has also gained from consumer demand for healthier and more convenient products. Growing demand for functional brands has also driven sales.
The yellow fats sector has seen a strong surge in butter sales, as consumers look for more natural products and take a more balanced approach towards healthy eating. The development of spreadable formats has also added value to sales.
While added-value activity has been a feature of the milk and dairy products market, a large proportion of the sales increases in 2007 and 2008 were driven by rising costs, which drove prices upwards. All sectors experienced strong inflation in 2008, as higher input and distribution costs fed through to retail prices.
The downturn in the UK economy has also had an impact on the market. There is a greater focus on price, leading some consumers to trade down to cheaper products and reduce volume purchases of more indulgent items. However, as many products in this market are regarded as essentials rather than luxuries, consumers will switch spending rather than leave the market, and economic recovery will have a positive impact on the market in the medium to long term.
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