Slowing butter growth puts the brakes on dairy market

The growth of the dairy market eased once again in the latest 12 weeks, down to 4% from 4.4% the pervious period.

Growth of the dairy market eased once again in the latest 12 weeks, down to 4% from 4.4% the pervious period. That said, the market continues to perform strongly, outpacing the total grocery market and fresh and chilled -  which saw growth of 1.9% and 1.3% respectively. In volume terms, the total grocery and fresh and chilled markets were flat, growing at 0.1% each, while dairy saw improved growth of 1.3%.

Commenting on the findings, Kantar Worldpanel dairy expert Oliver Bluring said: “The sector seeing the biggest drop off in growth this period has without doubt been butter, with 12 week uplift down at £24million, while growth of the overall dairy market dropped from £109million to £100million.”

The slowing growth of butter can be seen across all retailers, though Co-op in particular saw its relatively strong uplift last period almost disappear in the last 12 weeks. This comes despite the retailer seeing a strong performance at a total dairy level, where once again the Discounters saw a drop off of almost £10 million between them.

The overall dairy market continues to grow almost exclusively through non-promoted sales with Y for £X deals dipping into decline. This pattern is echoed within the butter sector, where Y for £X deals account for  a decline of £9 million in the past 12 weeks, while Temporary Price Reduction (TPR) sales up lift has fallen back by £7 million.

The decline we see in butter cuts across all life stages, although is particularly evident in those shoppers in the lower socio-economic groups. This again is in contrast to the wider dairy market where these shoppers are driving slight uplift –with retired people being the key group driving decline.