Cream rises to the top
The dairy market continued its strong progress seen over recent periods, growing by 3.7% in the 12 weeks to 23 April. This is the fastest rate of growth in five years, which helped the sector continue to outperform the overall market (3.6%).
A stand-out category within dairy this month is cream, which is seeing its strongest 12 week growth since September 2013 (+10.3%), and showing noticeable improvement in performance compared with recent periods. A number of sectors help drive this total category performance with single cream (+12.7%), double cream (+13.2%), whipping cream (+23.3%), premium (+21.5%), substitutes (+14.1%) and crème fraiche (+13.1%) all growing ahead of the category. Double cream alone makes up 33% of the category by value, and its performance can have a significant impact on the sector overall, with it driving 45% of total growth in the past 12 weeks.
The key driver of growth in cream is an average price increase (+6.2%) and, to a lesser extent, shoppers buying more (+0.8% volume per trip) and more often (+2.6% frequency). Fresh cream in particular is seeing category price inflation of 7.1% compared with the 3% seen across dairy.
Another factor behind rising prices is a reduction the proportion of cream sold on promotion; from 14.4% in the 12 weeks to April 2016 to only 4.8% the same time this year. Finally, premiumisation when shoppers switch within cream is also helping to drive this price increase. Cheaper cream substitutes (with an average price of £2.79) are in significant switch decline and the two most expensive sectors, flavoured cream (£7.07) and other specialty options (£8.29), are amongst the top 5 sectors in switch growth.*
*Average prices over 52 weeks