Dairy market slows, cheese and yoghurt drinks stand out

Slowing growth continues for the dairy market, down 0.1 percentage points to +1.6% for the latest 12 weeks to 24 March 2019. This is mirrored across total grocery which grew at +1.5% down from +2.2% last period. The fresh and chilled sector remains flat as it continues to see growth of +1.3% again. From a volume perspective, grocery is down 0.1 percentage points to +1.2% while dairy has growth of 0.1 percentage points, with volume up at +0.8%.

Nishita Pattni Client Executive for dairy explains: "the majority of the dairy sectors are experiencing a reduction in their contribution to growth, mainly butter for which growth has slowed to  £4.6 million. Proportionately, eggs experienced a faster slow down, this period down by £1.5 million. Cheese and yoghurt drinks stand out for their relatively stronger performance. Their contribution this period improved by £3.3 million and £1.5 million respectively."

Pattni continues: "the dairy slowdown is evident across most retailers, except for the discounters which see a positive uplift in their contribution by £2.3 million (Lidl) and £1.9 million (Aldi). Co-op and Waitrose have had a particularly challenging March as, despite being in overall growth year on year, their growth has slowed down by £3.4 million and £2.1 million respectively. When focusing on butter, Co-op again suffers, down by £1.2 million as well as Tesco who, although relatively better at a total dairy level, have had a slowdown in butter growth by £2.3 million."

Consumers in the pre-family life stage have slightly reduced dairy purchasing this quarter as, as it's decline has worsened by £4.7 million. This trend is reversed for butter as the pre-family group actually see an uplift in their growth for the category, whilst older shoppers such as the retired, empty nesters and older dependents experience slowdowns of £1.2 million (retired), £1.3 million (empty nesters and older dependents).

Within dairy, non-promoted sales are growing versus 2018 and growth compared to the last period this year has also seen a small increase of £600,000. However, this is outweighed by temporary price reduction promotions which see a slowdown in their contributions of £3.7 million and £1.5 million in the latest 12 weeks. This is also seen within butter where temporary price reduction growth slows by £3.7 million.