Report: Milk - US - May 2009 TOC

Scope and Themes
What you need to know
Definition
Data sources
Consumer survey data
Abbreviations and terms
Abbreviations
Executive Summary
Market experiences growth through price increase amid reduction in consumer demand
Milk faces increased competition from yogurt, yogurt drinks, and soymilk
Private labels dominate the highly commoditized market; top six processors only make up 26% of total sales
Organic milk drives growth, but remains a small portion of overall sales
Whole milk declines, low-fat/skim milk grows through price increases, and flavored milk remains stagnant
Growth drivers related to demographics have mixed blessings for the market
Personal incidence of using milk lags that of drinking carbonated drinks and bottled water
Green packaging, lack of growth hormone are important in purchasing milk
Milk users are most likely to use milk in cereals
Parents' attitude toward serving milk to children
Reasons for not drinking milk
Market Size and Forecast
Key points
Consumers retract demand amid growing competition from other dairy products
- Figure 3: FDMx volume sales of refrigerated white and flavored milk/eggnog/buttermilk in FDMx, 2003-08
Private-label milk sales define the total market
Sales and forecast of milk and dairy beverages
- Figure 4: Total FDMx and c-store sales and forecast of milk and dairy beverages, at current prices, 2003-13
- Figure 5: Total FDMx and c-store and forecast of milk and dairy beverages, at inflation-adjusted prices, 2003-13
Walmart sales
Competitive Context
Key points
Raw milk prices nosedive due to surplus; may create price deflation at retail in 2009
Yogurt and yogurt drinks give stiff competition to milk
- Figure 6: Yogurt and yogurt drinks dollar sales in FDMx, 2003-08
Soymilk soars at the expense of milk
Private labels grow their dollar share in the milk market, but create price deflation
- Figure 7: Private label and branded milk dollar and volume market share, 2003-08
Private label push toward hormone-free milk
Organic milk drives growth, but sales slow down amid recession
- Figure 8: Organic milk dollar and volume sales in FDMx, 2003-08
Segment Performance
Key points
Price increases contribute to the sales growth in refrigerated white milk
Little news for flavored milk
Shelf-stable single-serve milk and powdered milk drive growth in "other" milk
Segment sales and forecast of milk
- Figure 9: FDMx sales and forecast of milk, at current prices, by segment, 2003-13
- Figure 10: FDMx sales of milk, segmented by type, 2006 and 2008
Segment Performance--Refrigerated Skim and Low-fat Milk
Key points
Small growth from increase in prices; consumers continue to reduce demand
- Figure 11: FDMx volume sales of branded and private-label skim and low-fat milk, at current prices, 2003-08
Organic milk and hormone-free non-organic milk continue to show growth
Innovations will find growth in skim and low-fat milk
- Figure 12: FDMx sales and forecast of refrigerated skim/low-fat milk, at current prices, 2003-13
Segment Performance--Refrigerated Whole Milk
Key points
Obesity trends disfavor whole milk; demand will continue to slide
- Figure 13: FDMx volume sales of branded and private-label refrigerated whole milk, at current prices, 2003-08
Organic whole milk garners growth, but may lose share to skim/low-fat organic milk
Hispanics and blacks are primary whole milk consumers; but this base may dwindle
- Figure 14: Hispanic household milk consumption, by type, by language spoken at home, July 2007-September 2008
- Figure 15: FDMx sales and forecast of refrigerated whole milk, at current prices, 2003-13
Segment Performance--Refrigerated Flavored Milk/Eggnog/Buttermilk
Key points
Narrow base of target consumers and limitations in flavors challenge segment growth
Blacks and Hispanics are an ideal target to drive growth
- Figure 16: Hispanic household flavored milk consumption, by language spoken at home, July 2007-September 2008
- Figure 17: FDMx sales and forecast of refrigerated flavored milk/eggnog/buttermilk*, at current prices, 2003-13
Segment Performance--Other
Key points
Shelf-stable single-serve milk drives growth
Powdered and evaporated/condensed milk benefits from growth in Hispanic-targeted products
- Figure 18: FDMx U.S. sales and forecast of other milk, at current prices, 2003-13
Retail Channels
Key points
Supermarkets experience impressive growth on the strength of private labels
Convenience stores' milk sales slow down; face growing competition from other beverages
Drug and mass thrive on the strength of innovations and private labels
- Figure 19: FDMx and c-store sales of milk, by retail channel, 2006 and 2008
Retail Channels--Supermarkets
Key points
Supermarkets align private label innovation with consumer demand
Supermarkets have the opportunity to grow single-serve SS milk
- Figure 20: U.S. sales of milk at supermarkets, at current prices, 2003-08
Retail Channels--Convenience Stores
Key point
Slowing pace of innovation in convenience stores; flavor innovation my garner growth at this channel
- Figure 21: U.S. sales of milk at convenience stores, at current prices, 2003-08
Retail Channels--Natural Stores
Sales of milk and dairy beverages strong in the natural channel
- Figure 22: Natural product supermarket retail sales of milk and dairy beverages, at current prices, 2007-09*
- Figure 23: Natural product supermarket retail sales of milk and dairy beverages, at inflation-adjusted prices, 2007-09*
Natural channel sales by segment
- Figure 24: Natural product supermarket retail sales of milk and dairy beverages, by segment, 2007 and 2009
Brand performance: Milk and dairy beverages
- Figure 25: Manufacturer brand natural supermarket sales of milk and dairy beverages, 2007 and 2009
Natural channel sales of milk and dairy beverages by organic and conventional
- Figure 26: Natural product supermarket retail sales of milk and dairy beverages, by organic, 2007 and 2009
Natural channel sales of milk and dairy beverages segment by organic
- Figure 27: Natural product supermarket retail sales of milk and dairy beverage segment, by organic, 2007 and 2009
Natural channel sales of non-dairy beverages segment by storage type
- Figure 28: Natural product supermarket retail sales of non-dairy beverages, by storage, 2007 and 2009
Natural channel sales of milk, half & half and cream by glass bottle
- Figure 29: Natural product supermarket retail sales* of milk, half & half and cream, by glass bottle, 2007 and 2009
Market Drivers
Consumers lean toward eating healthily, but milk does not seem to have benefited from the trend
- Figure 30: Attitudes regarding healthy eating, 2003 and 2008
- Figure 31: Per capita consumption of milk in the U.S., by type, 2002-07
- Figure 32: Population, by age, 2004-14
Households with children and large households impact milk consumption
- Figure 33: Households, by presence of children, 1998-2008
- Figure 34: Annual consumption of milk in gallons in households, by number of people in household, 2008
- Figure 35: Households, by number of members, 1998-2008
Hispanics and blacks are crucial demographics for market growth
- Figure 36: Households, by presence of children, and race/Hispanic origin of householder, 2008
- Figure 37: Population, by race and Hispanic origin, 2003-13
Companies and Brands
Key points
Top six dairy processors only account for 26% of the total market share
Private labels rule FDMx sales
- Figure 38: FDMx sales of leading milk companies, 2007 and 2008
Brand Share--Refrigerated Skim/Low-fat Milk
Key points
Private labels continue upward trend; takeaway sales from branded low-fat/skim milk
Horizon remains the top organic brand and a growth driver in Dean' s portfolio
HP Hood garners marginal growth from Lactaid and Hood Simply Smart
Manufacturer and brand sales of refrigerated skim/low-fat milk
- Figure 39: FDMx brand sales of refrigerated skim/low-fat milk in the U.S., 2007 and 2008
Brand Share--Refrigerated Whole Milk
Key points
Private labels account for nearly 65% of the total market share
Dean' s Horizon Organic, Dean Country Fresh, and Swiss dairy brands experience growth
Manufacturer and brand sales of refrigerated whole milk
- Figure 40: FDMx brand sales of refrigerated whole milk in the U.S., 2007 and 2008
Brand Share--Flavored Milk/Eggnog/Buttermilk
Key points
Dean' s Horizon Organic posts growth, but sales remain small
Nestlé Nesquik, the biggest-selling flavored milk brand loses appeal
Private labels account for the biggest market share, but exhibit decline
Manufacturer and brand sales of refrigerated flavored milk/eggnog/buttermilk
- Figure 41: FDMx brand sales of refrigerated flavored milk/eggnog/buttermilk in the U.S., 2007 and 2008
Brand Share--Other
Key point
Shelf-stable Horizon Organic experiences favorable consumer response
Nestlé' s Hispanic-targeted products find small growth
Manufacturer and brand sales of other milk
- Figure 42: FDMx brand sales of other milk in the U.S., 2007 and 2008
Brand Qualities
Brands make an effort to differentiate through functional offerings amid competition from private labels
Kemps innovates to target wider base of consumers...
..but probiotics are still missing
Innovation and Innovators
Introduction
- Figure 43: Number of new product launches in milk and dairy beverage, 2003-08
Top 10 U.S. claims during 2003-08
- Figure 44: Trends in new product introductions in white milk and flavored milk, 2003-08
Top trends in new products
Trend toward natural, organic, and additive-free offerings
Growing trend toward omega-3-fortified milk
Flavor trends
Narrowing range of flavors: innovations center around chocolate flavor
- Figure 45: Trends in new flavor introductions in flavored milk, 2003-08
Trends in children-targeted milk and dairy-based products
Packaging trends
Move toward environmentally friendly packaging
Advertising and Promotion
Introduction
MilkPEP launches various initiatives to promote milk
Milk producers communicate hormone-free proposition in non-organic milk
Dean, the largest milk processor, listens to consumers
- Figure 46: Dean' s milk, no artificial hormone, television ad, 2008
Trend toward conveying about the (local) milk source--a point of pride and taste differentiation
Kemps Select scores points on fresh taste and humor
- Figure 47: Kemps Select, Local milk, television ad, 2008
Functional and pro-health innovation
Smart Balance new fat-free milk attempts to attract health-minded consumers
- Figure 48: Smart Balance, Delicious Fat-free milk and 1% heart-healthy milk, television ad, 2008
Promoting the natural goodness of milk
Oakhurst: naturally healthy, naturally good
- Figure 49: Oakhurst milk, Nutrient-rich Oakhurst milk, television ad, 2008
Dean educates about the benefits of calcium-rich milk
- Figure 50: Dean' s milk, milk and calcium, television ad, 2008
The Milk Consumer: Usage, Types and Frequency
Trends in household consumption of milk
- igure 51: Trends in household consumption of milk, by type, 2004-08
Households with children are primary consumers of whole milk and flavored milk
- Figure 52: Household milk consumption, by type, by presence of children, July 2007-September 2008
Ethnic households continue to use whole milk, but are likely to move to low-fat/skim milk
- Figure 53: Household milk consumption, by type, by race/Hispanic origin, July 2007-September 2008
Personal incidence of using milk is lower than that of carbonated drinks and bottled water
- Figure 54: Incidence of individual consumption of milk, by key demographics, January 2009
Trends in frequency of drinking milk in U.S. households
Households are using less milk in 2008, compared to 2006
- Figure 55: Trends in frequency of drinking milk, 2004-08
Households with children, large households, and Hispanic households consume most milk
- Figure 56: Household frequency* of drinking milk, by key demographics, July 2007-September 2008
Attitudes: Growth Hormone, Organic Milk, Green Packaging and Other Beverages
- Figure 57: Attitudes toward growth hormone in milk, green milk packaging, and new age beverages, by gender, January 2009
- Figure 58: Attitudes toward growth hormone in milk, green milk packaging, and new age beverages, by race/Hispanic origin, January 2009
- Figure 59: Attitudes toward growth hormone in milk, green milk packaging, and new age beverages, by presence of children, January 2009
Concern about growth hormones and media
- Figure 60: Growth hormone awareness and reaction, by age, January 2009
Attitudes toward Using Different Types of Milk and Interchangeability with Other Beverages
- Figure 61: Attitudes toward different types of milk and interchangeability with other beverages, by age, January 2009
How milk is used
- Figure 62: How milk is used, by gender, January 2009
- Figure 63: How milk is used, by race/Hispanic origin, January 2009
- Figure 64: How milk is used, by presence of children, January 2009
Reasons for Choosing Milk for Self and Children
Reasons for drinking milk
- Figure 65: Reasons for drinking milk, by presence of children, January 2009
Parents' attitudes and behaviors regarding milk use for children
- Figure 66: Parents' attitudes and behaviors regarding milk, by race/Hispanic origin, January 2009
Reasons for Not Drinking Milk
- Figure 67: Reasons for not drinking milk, by gender, January 2009
- Figure 68: Reasons for not drinking milk, by race/Hispanic origin, January 2009
Appendix: Other Useful Consumer Tables
Attitudes toward growth hormone in milk, milk packaging, and new-age milk beverages
- Figure 88: Attitudes toward growth hormone in milk, green milk packaging, and new age beverages, by age, January 2009
- Figure 89: Attitudes toward growth hormone in milk, green milk packaging, and new age beverages, by income, January 2009
Attitudes toward using different types of milk and interchangeability with other beverages
- Figure 90: Attitudes toward different types of milk and interchangeability with yogurt drinks, by race/Hispanic origin, January 2009
How milk is used?
- Figure 91: How milk is used, by age, January 2009
- Figure 92: How milk is used, by income, January 2009
- Figure 93: How milk is used, by region, January 2009
Reasons for Choosing Milk for Self and Children
Reasons for drinking milk
- Figure 94: Reasons for drinking milk, by gender, January 2009
- Figure 95: Reasons for drinking milk, by age, January 2009
- Figure 96: Reasons for drinking milk, by race/Hispanic origin, January 2009
- Figure 97: Reasons for drinking milk, by income, January 2009
- Figure 98: Reasons for drinking milk, by region, January 2009
Parents' attitudes and behaviors regarding milk consumption for children
- Figure 99: Parents' attitudes and behaviors regarding milk, by gender, January 2009
Appendix: Trade Associations
National and international associations
Regional associations
State associations

Milk - US - May 2009

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