Dairy market sales hit £2.8bn as Brits entered lockdown
The dairy market grew 6.6% in the 12 weeks to 22 March, bringing the value of the market up to £2.8bn as the nation entered lockdown. While the overall grocery market grew 7.6% over the same period, dairy fell behind the curve as shoppers prioritised longer life options when they started stocking up in anticipation of long stretches at home. All dairy sectors contributed to this performance, as shoppers bought more often (with frequency up 4.6% year on year) and bought slightly more on each trip (up 1.4%) – reflecting the trends seen in the grocery market as a whole.
The top performers among the retailers included M&S, Lidl and Ocado, which grew the fastest, while Tesco contributed the most to growth (£30.7m). That said, the supermarkets’ share of the dairy market shrunk, with Sainsbury’s the only retailer managing to hold its share flat. Lidl took the lead with the strongest share gain of 0.6 percentage points year on year. The discounters were also the fastest-growing channel, taking an extra £45m of spend year on year (12.7%), continuing the growth we’ve seen over the past year (9.1%).
The fastest-growing categories in dairy were cheese (up 11.0%) and cream (up 11.0%), which have both seen consistent growth over the last 52 weeks. However, milk grew 4.2% and was the second largest contributor to growth in the last 12 weeks, turning around its performance over recent months. Sitting behind this performance is the growth of long-life milks, which outperformed fresh milk once again (up 26.5%) and saw one of its largest uplifts for more than five years as shoppers stocked up.
Trends seen in the overall grocery market resonated in the dairy sector, with London being the key region of growth – with spend in the Capital up 11.7%, almost double its yearly growth rate 6.1%. Pre-families are the shopper group which has seen fastest growth, up 15.1% in the last 12 weeks compared to 6.6% growth in dairy spend overall.
As lockdown looks set to continue for the foreseeable future, it is possible that we could see continued high demand in the market. As shoppers run out of fresh food, they will increase their top up shops and dairy may gain more significance within consumers’ repertoires as they look to cater for more meals at home.
It is crucial for manufacturers to understand shopper and consumption behaviour through this time as shoppers stocking up could result in those products being picked up less frequently during the rest of the year, whilst for others growth may well continue. With more of us at home, could fresh milk see a continued rise in consumption as hot drink occasions move in home? And what will the impact of lockdown be on breakfast yoghurts, given these are three times more likely to be carried out of the home?