Milk - US - June 2007

Table of Contents

• Scope and Themes
• What you need to know
• Definition
• Abbreviations and terms
• Abbreviations
• Executive Summary
• Market at a glance
• Households with children and Hispanic households sustain the market
• Most segments exhibit decline at FDM
• Private labels--the biggest supplier in the market
• Channel changing--milk declines in supermarkets but grows in mass and convenience
• Advertising--milk as a weight loss option
• The consumer
• Nearly every household drinks milk
• Low-fat the favorite, but whole not far behind
• Types of milk consumed vary by race/ethnicity
• Parents recognize the benefit of milk, but don' t always practice what they preach
• Consumption with cereal the most likely use of milk
• Supermarkets the top source of milk purchases, but Wal-Mart not far behind
• Consumers concerned about growth hormones, but unlikely to change purchase behavior
• A third of infrequent drinkers just don' t like milk
• Functional milk--an effective strategy to compete with other beverages
• Future--increasing milk prices again?
• Market Drivers
• Mature market
• Decrease in per capita consumption suppresses growth
  • Figure 1: Per capita consumption of milk in the U.S., by type, 2000-05
• Growth in population
  • Figure 2: U.S. population and projections, by age, 2001-11
• Increased penetration in under-penetrated channels
• Quick-service restaurants contribute to the popularity of single-serve milk
• Milk growth in convenience stores and vending channel
• School policies discourage milk growth in schools
  • Figure 3: Prevalence of obesity among children aged 6-19 years, 1976-2004
• Organic milk drives growth
• Competition from other non-alcoholic beverages
  • Figure 4: Per capita consumption of carbonated beverages, bottled water and sports drinks, 2000-05
• Competition from yogurt
• Households with children influence milk market
  • Figure 5: Volume of milk consumed, by presence of children in the household, January-October 2006
  • Figure 6: Number of children in households, 2001-06
• Children gravitate towards other RTD non-carbonated beverages
  • Figure 7: Volume of milk consumed, by presence of children in the household, 2002 and 2006
  • Figure 8: Kids' preference for milk, 2002, 2004 and 2006
• Hispanic households drive growth, but black and Asians also important
  • Figure 9: Volume of milk consumed, by race/ethnicity, January-October 2006
  • Figure 10: Average household size, by race/Hispanic origin of householder, 2001 and 2006
• Market Size and Trends
• Market size
  • Figure 11: Total U.S. retail sales of milk, at current and constant prices, 2001-06
  • Figure 12: FDM* volume sales and prices of milk, 2001-06
• Wal-Mart estimate
• Market trends
• New product introductions on the rise
  • Figure 13: New milk product introductions, 2001-07
• Flavor trends
  • Figure 14: Number of new milk introductions, by flavor, 2001-07
• Market Segmentation
• Introduction
  • Figure 15: FDM sales of milk, by type, 2004 and 2006
• Refrigerated low-fat/non-fat
  • Figure 16: FDM sales of refrigerated low-fat and non-fat milk, at current and constant prices, 2001-06
  • Figure 17: FDM volume sales and prices of low-fat and skim milk, 2001-06
• Refrigerated whole milk
  • Figure 18: FDM sales of refrigerated whole milk, at current and constant prices, 2001-06
  • Figure 19: FDM volume sales and prices of whole milk, 2001-06
  • Figure 20: Household consumption of milk by type, by race/ethnicity, January-October 2006
• Refrigerated flavored milk/eggnog/buttermilk
  • Figure 21: FDM sales of refrigerated flavored milk/eggnog/buttermilk, at current and constant prices, 2001-06
• Kefir/milk substitutes/soymilk
  • Figure 22: FDM sales of kefir/milk substitutes/soymilk, at current and constant prices, 2001-06
  • Figure 23: Attitude towards milk and milk alternatives, by age, April 2007
• Evaporated/condensed milk
  • Figure 24: FDM sales of evaporated/condensed milk, at current and constant prices, 2001-06
• Milkshakes/non-dairy drinks
  • Figure 25: FDM sales milkshakes/non-dairy drinks, at current and constant prices, 2001-06
• Supply Structure
• Companies and brands
  • Figure 26: FDM sales of major manufacturers in the milk market in the U.S., 2004 and 2006
• Refrigerated low-fat/non-fat
  • Figure 27: Selected brand sales and market share of refrigerated low-fat and non-fat milk at FDM in the U.S., 2004 and 2006
• Refrigerated whole milk
  • Figure 28: Selected brand sales and market share of refrigerated whole milk at FDM in the U.S., 2004 and 2006
• Refrigerated flavored milk/eggnog/buttermilk
  • Figure 29: Selected brand sales and market share of refrigerated flavored milk/eggnog/buttermilk at FDM in the U.S., 2004 and 2006
• Kefir/milk substitutes/soymilk
  • Figure 30: Selected brand sales and market share of kefir/milk substitutes/soymilk at FDM in the U.S., 2004 and 2006
• Advertising and Promotion
• National processors' organizations
• Body by Milk--teens encouraged to trade soda for milk
• Got milk?--a message to mom about childhood obesity
  • Figure 31: Got Milk?, TV ad, 2006
• 24/24 milk
  • Figure 32: 2424 milk and weight loss, TV ad, 2006
• Suppliers
• White Wave Foods Company
  • Figure 33: Silk Soymilk, TV ad, 2006
• HP Hood
  • Figure 34: Hood hormone-free milk, TV ad, 2006
• Retail Distribution
• Introduction
  • Figure 35: U.S. retail sales of milk, by channel, 2004 and 2006
• Supermarkets
  • Figure 36: U.S. supermarket sales of milk, at current and constant prices, 2001-06
• Mass and other
  • Figure 37: U.S. mass and other* channels sales of milk, at current and constant prices, 2001-06
  • Figure 38: Number of regular stores and supercenters opened by Wal-Mart, FY 2001-06
• Convenience stores
  • Figure 39: U.S. convenience stores sales of milk, at current and constant prices, 2001-06
• Drug stores
  • Figure 40: U.S. drug stores sales of milk, at current and constant prices, 2001-06
• Vending
  • Figure 41: U.S. vending sales of milk, at current and constant prices, 2001-06
• Natural channel/SPINS
  • Figure 42: Natural product supermarket retail sales of milk and milk substitutes, at current and constant prices, 2004-06
• Natural channel sales by segment
  • Figure 43: Natural product supermarket retail sales of milk, by segment, 2004-06
• Organic leads non-organic
  • Figure 44: Natural product supermarket retail sales of dairy milk by organic/non-organic, 2004-06
• Shelf stable losing lead over refrigerated
  • Figure 45: Natural product supermarket retail sales of non-dairy beverages, by storage, 2004-06
• Manufacturers and brands
• Brand sales: milk
  • Figure 46: Manufacturer and brand sales of milk in natural supermarkets, 2004 and 2006
• Brand sales: non-dairy beverages
  • Figure 47: Manufacturer brand natural supermarket sales of non-dairy beverages, 2004 and 2006
• The Consumer--Household Consumption of Milk
• Introduction
• Summary
• Household consumption
• Household usage of milk
  • Figure 48: Household consumption of milk, 2002, 2004 and 2006
  • Figure 49: Household consumption of milk, by household size, January-October 2006
• Types of milk consumed
  • Figure 50: Types of milk consumed, 2002, 2004 and 2006
  • Figure 51: Household consumption of milk by type, by presence of children in household, January-October 2006
  • Figure 52: Household consumption of milk by type, by race/ethnicity, January-October 2006
• Volume of milk consumed
  • Figure 53: Volume of milk consumed, 2002, 2004, and 2006
  • Figure 54: Volume of milk consumed, by age of head of household, January-October 2006
  • Figure 55: Volume of milk consumed, by race/ethnicity, January-October 2006
• Household use of milk flavorings
  • Figure 56: Household use of milk flavoring, 2002, 2004 and 2006
• Volume of flavored milk consumed
  • Figure 57: Volume of flavored milk consumed, by race/ethnicity, January-October 2006
• Brands of milk flavoring used
  • Figure 58: Brands of milk flavoring used, by presence of children in the household, January-October 2006
• The Consumer--Adult Consumption of Milk
• Introduction
• Summary
• Adult incidence of drinking milk
  • Figure 59: Adult consumption of milk, by selected demographics, April 2007
• How milk is used
  • Figure 60: How milk is used, by gender, April 2007
  • Figure 61: How milk is used, by gender, April 2007
  • Figure 62: How milk is used, by age, April 2007
  • Figure 63: How milk is used, by race/ethnicity, April 2007
  • Figure 64: How milk is used, by presence of children in the household, April 2007
• The Consumer--Kids' and Teens' Consumption of Milk
• Introduction
• Summary
• Kids' preference for milk and milk alternatives
  • Figure 65: Kids' preference for milk and milk alternatives, 2002-06
• Kids' usage of milk flavorings
  • Figure 66: Kids' milk flavoring usage frequency, 2002-06
• Teens' use of milk flavorings
  • Figure 67: Teens' use of milk flavorings, 2002-06
• Teens' frequency of using milk flavorings
  • Figure 68: Teens' milk flavoring usage frequency, 2002-06
• Parents' attitudes and behaviors regarding milk consumption for children
  • Figure 69: Parents' attitudes and behaviors regarding milk, April 2007
  • Figure 70: Parents' attitudes and behaviors regarding milk, by race/ethnicity, April 2007
• The Consumer--Where Milk is Bought
• Introduction
• Summary
• Choice of primary and secondary channels to purchase milk
  • Figure 71: Where milk is bought, April 2007
• Where milk is usually bought
  • Figure 72: Where milk is usually bought, by age, April 2007
  • Figure 73: Where milk is usually bought, by household income, April 2007
  • Figure 74: Where milk is usually bought, by presence of children in the household, April 2007
• Where milk is also bought
  • Figure 75: Where milk is also bought, by presence of children in the household, April 2007
• The Consumer--Attitudes, Behaviors and Concerns
• Introduction
• Summary
• Incidence of trying functional and milk-based beverages
  • Figure 76: Incidence of trying selected functional and milk-based beverages, April 2007
  • Figure 77: Incidence of trying selected functional and milk-based beverages, by age, April 2007
  • Figure 78: Incidence of trying selected functional and milk-based beverages, by race/ethnicity, April 2007
  • Figure 79: Incidence of trying selected functional and milk-based beverages, by presence of children in the household, April 2007
• Concerns about growth hormones
  • Figure 80: Incidence of being concerned about growth hormones, by race/ethnicity, April 2007
  • Figure 81: Incidence of being concerned about growth hormones, by presence of children, April 2007
• Growth hormones and media attention
  • Figure 82: Growth hormone awareness and reaction, by age, April 2007
• Attitudes and behaviors regarding milk
  • Figure 83: Attitudes and behaviors regarding milk, by age, April 2007
• Hormone-free more appealing than organic in terms of price
• Most milk drinkers can tell the difference between brands
• Longer-lasting product might attract infrequent drinkers
• Benefit of soy does not appear to be reaching those most at risk for heart disease
• Respondents appear open to cloned product
• Milk competing with yogurt drinks among younger respondents
• Older respondents less willing to paying more for organic
• Younger respondents trying out new formats
• Reasons for drinking milk
  • Figure 84: Reasons for drinking milk, by age, April 2007
• Reasons for not drinking milk
  • Figure 85: Reasons for not drinking milk, by gender, April 2007
• Future and Forecast
• Future trends
• Functional milk positioned to compete with other beverages
• Omega-3 fatty acids appearing more often
• Organic milk--continued strong demand met by oversupply
• Hormone-free non-organic milk promises future growth
  • Figure 86: Oberweis hormone-free milk, TV ad, 2006
• A new product boasts the taste of whole milk with none of the fat
  • Figure 87: SunMilk, TV ad, 2006
• Inflationary pressure on milk prices
• Market forecast
• Milk market
  • Figure 88: Forecast of total U.S. retail sales of milk, at current and constant prices, 2006-11
• Refrigerated low-fat/non-fat milk
  • Figure 89: Forecast of U.S. FDM* sales of refrigerated low-fat and non-fat milk, at current and constant prices, 2006-11
• Refrigerated whole milk
  • Figure 90: Forecast of U.S. FDM* sales of refrigerated whole milk, at current and constant prices, 2006-11
• Refrigerated flavored milk/eggnog/buttermilk
  • Figure 91: Forecast of U.S. FDM* sales of refrigerated flavored milk/eggnog/buttermilk, at current and constant prices, 2006-11
• Kefir/milk substitutes/soy milk
  • Figure 92: Forecast of U.S. FDM* sales of kefir/milk substitutes/soy milk, at current and constant prices, 2006-11
• Evaporated/condensed milk
  • Figure 93: Forecast of U.S. FDM* sales of evaporated/condensed milk, at current and constant prices, 2006-11
• Milkshakes/non-dairy drinks
  • Figure 94: Forecast of U.S. FDM* sales of milkshakes/non-dairy drinks, at current and constant prices, 2006-11
• Forecast factors
• Appendix: Trade Associations
• National and international associations
• Regional associations
• State associations