MARKET ACCESS SECRETARIAT
Global Analysis Report
Dairy Products
Western Europe
January 2015
EXECUTIVE SUMMARY
CONTENTS
Western Europe is home to approximately 500 million inhabitants
(January 2014, Planet Retail), which includes a slightly increasing
population, with a growing number of aging residents.
Executive Summary ....................... 1
The region's economic and political core includes Germany, France,
the United Kingdom (U.K.), Italy, and Spain. These countries
account for slightly less than 80% of the region's population and
consumer expenditures (Planet Retail).
Expenditure on Dairy Products… …2
The European dairy market comprises many interconnected dairy
products that vary in geographic scope from regional specialities to
worldwide reach, depending on the product. As trade of the dairy
commodity becomes more global, with national and multinational
companies competing in nearly every region, many products are
also becoming more international. However, consumers of milk and
dairy products across European regions exhibit widely varying
preferences for taste, convenience, nutrition, wholesomeness, and
packaging.
Cheese ...................................... 5
Dairy products range from fairly standardized goods, such as milk,
butter, and non-fat dry milk powder, to multi-variety, multi-flavoured
products, such as specialty cheeses, fermented drinks, and milk
protein fractions used in food and beverage products. Some dairy
products are produced and consumed locally, nationally or in
European markets, while others are consumed internationally.
Products such as fresh milk, yogurt, and cheese are intended for
direct consumption. Dairy products are also consumed indirectly as
ingredients in other foods, such as pizza, snack bars, and bakery
products. Non-food uses range from nutraceuticals to industrial
applications.
Introduction ..................................... 2
Growth on Dairy Products .............. 4
Subsector Analysis ......................... 4
Drinking Milk Products............... 8
Yogurt and Sour Milk ... .....……13
Other Dairy Products… . ……...16
Distribution ................... …………..17
For More Information .................... 19
Resources .................................... 19
Visit our online library of public
reports for more information on this
and other markets.
INTRODUCTION
Western Europe is known for its higher standards of living, with noticeably higher income levels. It is the
wealthiest region on the European continent, with a per capita Gross Domestic Product (GDP) that is
more than three times as high as in Central Europe and five times as high as in Eastern Europe. Both
the United Sates (U.S) and Japan, however, have slightly higher levels of per capita GDP, according to
2014 data (Planet Retail).
The European countries with the wealthiest populations, however, are those that are less populated, such
as Luxembourg, Lichtenstein, Switzerland, Norway, Ireland, or the generally healthy Scandinavian
economies of Iceland, Denmark, Sweden and Finland; however, these nations only account for 12% of
Western Europe's consumer expenditures (Planet Retail). Moreover, the region's economy is closely
linked to the performance of its key national markets – Germany, the U.K., France, Italy and Spain –
which account for 75% of economic output (Planet Retail).
According to the International Dairy Federation, most Western European economies have a positive
outlook in terms of private consumption; however, consumers within each market behave differently. For
example, British consumers continue to spend large proportions of their income on domestic retail,
foodservice outlets and buying property, meanwhile Germans tend to rent a flat, eat as cheaply as
possible and spend on long holidays and expensive cars instead.
EXPENDITURE ON DAIRY PRODUCTS
Variations in European consumer preferences reflect economic status, culinary practices, and eating
habits of different countries. Income levels and the availability and cost of milk are key factors behind
differences in dairy product consumption throughout Europe.
European Main Markets Expenditures on Dairy Products Per Capita 2008-2018
Country
European Union
France
Germany
Italy
Spain
United Kingdom
2008
339.6
443.5
327.8
416.1
320.9
262.2
2009
339.4
437.9
328
414.9
298.1
273.1
2010
345.3
440.8
345.2
406.5
306.7
269.5
2011
358.4
455.0
368.9
418.1
309.5
275.7
2012
363.6
464.4
386.4
411.6
302.6
278.7
2013
370.7
468.5
410.5
401.9
296.8
284.2
F
2014
377.2
470.6
425.3
402.9
297.7
290.6
F
2015
387.0
477.9
441.5
408.3
302.7
297.8
F
2016
399.2
486.2
458.6
417.4
311.2
307.5
F
2017
412.1
495.5
475.3
427.9
321.5
316.8
F
2018
425.2
505.3
490.0
439.7
333.4
326.4
Source: Euromonitor International, 2014. F=Forecast
Major differences in consumption patterns for dairy products can exist even within a country or region for
a variety of reasons, including ethnic and cultural factors. This is particularly true in Europe where, for
example, Finland has a noticeably higher proportion of per capita liquid milk consumption to per capita
cheese consumption. France and Greece have a higher per capita consumption of soft-type cheeses than
the rest of the EU.
Cheese Consumption in Kilogram per Capita in Main European Market
Country
European Union
France
Germany
Italy
Netherlands
Sweden
United Kingdom
2007
16.4
25.6
22.3
20.9
21.5
17.6
11.2
2008
16.7
26.9
22.2
20.7
20.5
18.5
11.7
2009
16.7
26.5
22.3
21
19
18.7
10.9
2010
17.2
26.6
23.5
21.1
19.5
18.9
11.3
2011
17.3
26.3
24.2
21.8
19.4
19
11
2012
17.2
26.2
24.3
20.9
19.4
19.7
11.2
Source: International Dairy Federation and Statistics Canada. Calculations done by AAFC-AID, Dairy Section
Page | 2
Top European Markets for Butter Consumption in Kilogram per Capita
Country
European Union
France
Germany
Czech Republic
Austria
Finland
2007
3.7
8.1
6.4
4.1
5.1
2.8
2008
3.6
7.5
6.2
4.7
4.9
2.7
2009
3.6
7.7
5.8
5
4.9
3.1
2010
3.6
7.6
5.7
4.9
5.1
3.4
2011
3.6
7.6
6.1
4.9
5.0
4.1
2012
3.7
7.4
6.2
5.2
5.0
4.5
Source: International Dairy Federation and Statistics Canada. Calculations done by AAFC-AID, Dairy Section
Top European Markets for Milk Consumption in Litres per Capita
Country
European Union
Ireland
Finland
Estonia
United Kingdom
Cyprus
2007
64.1
139.5
129.1
131.9
102.1
..
2008
62.8
136.9
128.0
136.0
100.2
95.7
2009
63.1
136.4
131.5
136.4
101.2
97.5
2010
62.9
137.1
128.4
128.7
104.7
97.7
2011
62.3
135.6
127.0
120.9
104.1
95.1
2012
62.0
135.6
128.3
120.9
102.9
97.9
Source: International Dairy Federation and Statistics Canada. Calculations done by AAFC-AID, Dairy Section
The structure of Western Europe's population has changed markedly since 1980, with the proportion of
those aged 65+ rising dramatically. Although the pattern varies across different countries, with Italy and
Germany aging particularly rapidly, this maturing demographic creates serious challenges for dairy
companies.
However, the aging population generates a growing source of consumer demand for targeted products
and services thus creating business opportunities. Demand for goods and services such as healthcare
and products for the elderly has risen, especially given that older people often wield significant spending
power. The average gross annual income of the 65+ year-old demographic across Western Europe in
2013 was US$40,645.
Average Gross Income by Age in Western Europe in US$
Average Gross Income by Age
Aged 15-19
Aged 20-24
Aged 25-29
Aged 30-34
Aged 35-39
Aged 40-44
Aged 45-49
Aged 50-54
Aged 55-59
Aged 60-64
Aged 65+
2008
43,511
20,896
32,721
39,472
44,282
48,258
50,600
51,522
51,217
50,284
48,048
41,615
2009
40,143
19,265
30,206
36,355
40,623
44,054
46,576
47,418
47,246
46,386
44,350
38,576
2010
39,503
19,154
30,021
35,984
39,909
43,055
45,791
46,535
46,405
45,526
43,543
37,899
2011
42,335
20,400
32,139
38,482
42,383
45,754
49,013
49,743
49,894
48,587
46,881
40,809
2012
40,145
19,160
30,349
36,489
39,910
43,028
46,214
47,199
47,365
46,046
44,579
39,035
2013
41,579
20,058
31,792
38,051
41,367
44,176
47,281
48,790
48,791
47,682
46,077
40,645
Source: Euromonitor International, 2014
Although higher incomes generally lead to higher overall consumption of dairy products, the same cannot
be said of consumption of individual products. For example, in several high-income countries,
consumption of cheese is increasing, but consumption of fluid milk is decreasing. Per capita consumption
of yogurt is also relatively high in high-income countries, such as France and Germany, and demand
growth is unabated. However, unlike markets for dry milk powders or butter, the European market for
Page | 3
yogurt is highly fragmented by country or region so as to meet specific consumer demands for taste or
nutritional attributes, according to Euromonitor International.
GROWTH IN DAIRY PRODUCTS, 2009-2018
Retail dairy purchases are growing at widely different rates among the European countries in response to
rising incomes and expanding urban populations. Mass media promotions and new forms of retail
channels are also driving growth in countries where dairy products are marketed to Europe’s aging
population and typically affluent senior demographic who form an attractive target market for functional
dairy food and drink, for example.
Functional claims are helping this increase by providing consumers access to expanded product
selections and brands. Some European governments are also facilitating the access by encouraging milk
consumption in schools as a means to improve the diets of children. Younger populations across the five
top European economies are both the main demographic for buying dairy drinks in general and for buying
those products they consider to have health benefits or contain functional ingredients.
Retail Value Sales (in US$ billion)
Western Europe Growth in Dairy Sector in US$ Billions 2008-2018
160
140
120
100
80
60
40
20
0
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Source: Euromonitor International, 2014
SUBSECTOR ANALYSIS
The European dairy industry offers a wide range of products from raw milk to speciality ingredients to
other industries. Europe is a mature market for dairy products and its consumers are looking for new
benefits in familiar products. Innovation was successful in applying new technologies, and new products
formulations, that fulfil consumer needs in established products. This is reflected in the collected data
from Mintel Global New Products Database (GNPD).
Page | 4
Launches of Dairy Products in Key European Markets 2011-2013
4,000
3,500
705
907
3,000
734
2,500
2,000
665
1,500
500
Italy
750
904
1,018
1,121
1,095
2011
2012
2013
629
1,000
UK
808
740
France
Germany
0
Source: Mintel GNPD, 2014
Cheese
(This is the aggregation of processed and unprocessed cheese.)
Euromonitor forecasts that the European cheese market will maintain steady growth across Europe
through 2018. However, this growth has been sustained by lowering costs and because Europeans are
no longer seeing cheese as simply a separate after a meal dish. It has now branched into the snacking
sector and is being increasingly used in meal preparation.
*
Top Cheese Markets the World in 2014 in US$ Billions, Current Prices – Fixed 2013 Exchange
Rates
Retail Value Sales (US$ billion)
25
23
20
15
12
9
10
9
9
8
7
5
5
5
4
0
US
France
Russia
Germany
Italy
Brazil
UK
Mexico
Venezuela
Canada
Source: Euromonitor International, 2014.* 2014 figures are provisional and based on partial-year estimates.
Page | 5
Forecast Cheese Value Sales by Key Markets 2014/2018 and Ranking
US$ billion
25
1
20
2014
15
10
5
2018
2
3
1
2
3
5
4
6
4
5
6
7
7
0
US
France
Source: Euromonitor International, 2014
Russia
Germany
Italy
Brazil
UK
As compared to the previous year, sales growth in 2013 was slightly higher in key markets except in Italy
where it was stagnant. Cheese is generally considered, for many dairy producing European countries, as
an essential food basket item, when faced with a morose economic condition. Many European consumers
find in cheese a culturally symbolic food item and a way of reconnecting with aspects of pleasure, fun and
conviviality.
Historic Retail Value Sales of Cheese in Key European Markets, in US$ Millions and Period Growth
(%), Current Prices – Fixed 2013 Exchange Rates
Country
2009
2010
2011
2012
2013
France
Germany
Italy
United Kingdom
10,572.8
8,356.4
9,092.0
5,708.1
10,797.2
8,210.7
9,264.3
5,860.2
11,193.8
8,341.9
9,497.6
6,106.7
11,375.4
8,661.3
9,575.7
6,426.5
11,500.5
8,867.1
9,145.0
6,562.8
Source: Euromonitor International, 2014
2009-13
CAGR*
2.1%
1.5%
0.1%
3.5%
*CAGR: Compounded Annual Growth Rate
Cheese sales in key markets in Europe are likely to remain on a positive outlook over the forecast period
with a CAGR of 2% for both volume and value according to Euromonitor. Cheese is a food item deeply
rooted in the culinary, nutritional and degustation habits of the European population. However, new
consumption patterns, especially in the application and ways of consuming cheese, notably as snacks
and/or as culinary ingredients as practiced in North America may spur innovation and help the category
growth.
Forecast Retail Value Sales of Cheese in Key European Markets, in US$ Millions and Period
Growth (%), Current Prices – Fixed 2013 Exchange Rates
Country
2014
2015
2016
2017
2018
France
Germany
Italy
United Kingdom
11,673.6
9,093.3
8,898.5
6,709.8
12,074.0
9,333.7
8,877.6
6,830.4
12,526.3
9,572.8
8,934.6
6,899.0
13,033.1
9,829.2
9,054.4
6,987.8
13,603.8
10,095.3
9,210.0
7,099.8
Source: Euromonitor International, 2014
2014-18
CAGR
3.9%
2.6%
0.9%
1.4%
*CAGR: Compounded Annual Growth Rate
Page | 6
New Product Launches of Cheese Products in Key European Markets in 2013
500
437
400
397
332
265
300
200
100
0
Germany
France
Italy
UK
Source: Mintel GNPD, 2014
There were 1,431 new cheese products launched in the four key European markets from January 2013 to
December 2013. Of the new products that were launched for that year, 437 were in Germany, 397 in
France 332 in Italy and 265 in the United Kingdom.
A large number of cheeses with controlled designation of origin, that guarantees that the cheese
originates from a specific region, from milk from specific herds of animals in the same area and, that the
cheese was made using strictly defined traditional methods, which guarantees the authenticity and quality
of the products, are rather hindered in growth because of these geographical limitation, despite their
popularity.
New Product Launches of Cheese Products by Sub-Category in Key European Markets in 2013
Category
Germany
France
Italy
UK
Hard Cheese & Semi-Hard Cheese
44.9%
31.0%
32.8%
53.6%
Soft Cheese & Semi-Soft Cheese
34.3%
41.8%
44.6%
27.2%
Processed Cheese
10.8%
10.6%
19.6%
14.3%
Soft Cheese Desserts
10.1%
16.6%
3.0%
4.9%
Source: Mintel GNPD, 2014
New Product Launches of Cheese Products by Claim in Key European Markets in 2013
Claim
Germany
France
Italy
UK
No Additives/Preservatives
13.50%
6.30%
29.22%
11.70%
Convenient Packaging
16.02%
7.81%
13.86%
20.38%
Vegetarian
Low/No/Reduced Allergen
Organic
3.43%
0.76%
1.20%
66.42%
25.63%
1.26%
9.94%
3.77%
8.70%
18.64%
3.01%
1.89%
Source: Mintel GNPD, 2014
European consumers overall are increasingly looking for healthier, more natural foods, which offer
convenience as well, therefore no additives/preservatives is the leading claim among the four review
countries, closely followed by convenient packaging.
Page | 7
New Product Launches of Cheese Products by Category in Key European Markets in 2013
No Additives/ Convenient
Preservatives Packaging
Category
Hard Cheese & SemiHard Cheese
Soft Cheese & Semi-Soft
Cheese
Processed Cheese
Soft Cheese Desserts
Vegetarian
Low/No/
Reduced
Allergen
Organic
23.6%
81.6%
57.6%
47.5%
29.9%
30.7%
10.4%
23.7%
23.1%
51.2%
30.2%
15.6%
8.0%
0.0%
12.1%
6.6%
24.4%
5.0%
5.5%
13.4%
Source: Mintel GNPD, 2014
Over 30.7% of “No Additives/Preservatives” product launches are in the soft cheese and semi-soft
cheese category, followed closely by processed cheese. Italy is the leading country for new products with
this claim.
Organic cheese ranked fifth is new product launches and plays an important role in France and Germany,
who, together, account for most recent organic cheese launches in the E.U. 51.2% of the new organic
cheese products is in the soft and semi-soft cheese category.
The number of consumers ready to pay more for natural food, such as “free-from” cheese claims, is
increasing in all countries. In almost all European countries, women and elderly consumer groups are
known to be generally more health conscious than average and are the most likely to pay more. Organic
foods are also appreciated by the French and the Germans; once again it is the only country where the
numbers of consumers who are willing to pay more for organic foods is rising according to Mintel and
judging by the number of new product introductions in 2013.
Convenience, on the other hand, is high in demand in the U.K. close to 20.4% of cheese with convenient
packaging is launched there. As much as 81.6% of cheese with this claim is in the hard and semi-hard
cheese category.
Historic and Forecast Cheese Retail Market Prices per Kilogram in US$ in Key Markets
Country
France
Germany
Italy
UK
2009
12.3
9.8
13.4
10.4
2010
11.8
9.1
12.7
10.3
2011
12.4
9.9
13.5
11.1
2012
11.6
9.1
12.4
11.4
2013
12.1
9.6
12.9
11.3
F
2014
12.4
9.8
13.1
12.0
F
2015
11.8
9.2
12.3
11.9
F
2016
12.1
9.3
12.2
11.9
F
2017
12.3
9.3
12.2
12.0
Source: Mintel GNPD, 2014. *F=Forecast
Top Five Company and Their Market Share in Cheese Products in 2013
Company
Germany
France
Italy
UK
Spain
Total Sample
Lidl
8.2%
0.2%
4.4%
2.7%
6.3%
4.6%
Fromageries Bel
0.2%
6.6%
2.9%
4.1%
1.1%
2.4%
Arla Foods
1.0%
0.0%
0.0%
2.7%
1.1%
1.8%
Tesco
0.0%
0.0%
0.0%
13.7%
0.0%
1.6%
Aldi
0.4%
0.7%
0.0%
4.5%
3.3%
1.2%
Source: Mintel GNPD, 2014
Page | 8
Drinking milk products
(This is the aggregation of fresh/pasteurised milk, long-life/Ultra-High-Temperature (UHT) milk, goat milk,
flavoured milk drinks, soy beverages, powder milk and flavoured powder milk drinks.)
Milk is perhaps the most basic of all foods, regarded as a staple among much of the European
population. The milk drinking products market has significant potential to diversify. Milk and drinking milk
nutritional credentials appeal to different consumer groups. For example; as an important source of
calcium, milk and flavoured milk products can easily be promoted as improving bone health, a significant
plus point with the aging European population.
While milk’s high protein content is also beneficial for children, low-fat milk drinks are often used by
dieters, often women. Milk and drinking milk products are also promoted to be an excellent post-exercise
drink.
Functionality is another potential development for added value, for example functional milk product can
help digestion and boost the immune system, among other benefits.
Drinking milk products such as chocolate milk sells as a comfort food, an indulgence, and as a healthy
item. Milk can be used as part of a breakfast, as a snack, in hot drinks, or as a cooking and baking
ingredient.
Top Drinking Milk Markets in the World in 2014* in US$ Billions, Current Prices – Fixed 2013
Exchange Rates
Retail Value Sales (US$ Billion)
25.0
20.0
20.0
13.9
15.0
10.0
7.8
6.1
5.2
5.0
4.6
4.1
3.9
3.7
3.6
Italy
Canada
0.0
US
Brazil
Japan
United Mexico
Kingdom
Spain Germany South
Korea
Source: Euromonitor International, 2014.* 2014 figures are provisional and based on part-year estimates.
Historic Retail Value Sales of Drinking Milk Product in Key European Markets, in US$ Millions and
Period Growth (%), Current Prices – Fixed 2013 Exchange Rates
Country
France
Germany
Italy
Spain
United Kingdom
2009
3,399.2
3,714.9
3,632.6
5,020.2
5,881.8
Source: Euromonitor International, 2014
2010
2011
3,312.3
3,693.1
3,717.7
4,792.0
5,963.5
3,353.0
3,844.9
3,843.5
4,584.3
5,984.0
2012
3,302.1
3,766.8
3,913.3
4,528.9
5,997.5
2013
3,280.4
3,993.6
3,818.5
4,574.8
6,094.3
2009-13
CAGR*
-0.9%
1.8%
1.3%
-2.3%
0.9%
*CAGR: Compounded Annual Growth Rate
Page | 9
Euromonitor forecasts that the French milk products market will make slow, but steady progress between
2014 and 2018 with a 1.7% CAGR. Organic milk will gain more ground, though milk with added vitamins
remains the most dynamic sub-segment.
Value sales in Germany are forecast to expand by 3.1% CAGR to 2018, faster than anywhere among the
key market, according to Euromonitor. Despite the stagnant volume consumption of milk and milk
products in Germany, the average price is above the European average, and is forecast to keep growing.
The Italian market is holding steady growing by 1.4% CAGR to 2018. While there are fewer launches
compared to the other big 5 countries, the Italians do well with new functional products, mainly in the
Yogurt drinks sector, digestive, immune system, and also heart healthy (added omega) products; this
helps maintain consumer interest.
In Spain, drinking milk products are expected to see a steady increase of 2.3% CAGR in constant value
sales to 2018. Drinking milk products is quite a mature category, in which health and wellness is set to
continue to offer growth opportunities.
According to Euromonitor, the strongest growth category in drinking milk products in the U.K. is goat milk
as well as flavoured milk drinks and flavoured powder drinks. British consumers are increasingly keen to
try new options as alternative to cow’s milk, either out of curiosity or for health reasons, and this is leading
to rising demand for the products in all of these categories, even though they remain very small
categories in comparison with cow’s milk. Drinking milk products is forecast to see a growth of modest
1.3% CAGR to 2018, a sign of the maturity of the U.K. market.
Forecast Retail Value Sales of Drinking Milk Product in Key European Markets, in US$ Millions and
Period Growth (%), Current Prices – Fixed 2013 Exchange Rates
Country
2014
2015
2016
2017
2018
France
Germany
Italy
Spain
United Kingdom
3,305.1
4,131.3
3,729.9
4,616.6
6,077.0
3,344.6
4,263.6
3,740.5
4,708.2
6,174.2
3,393.9
4,407.7
3,786.8
4,814.3
6,235.0
3,455.2
4,566.5
3,849.7
4,928.0
6,308.0
3,523.5
4,691.8
3,922.3
5,049.4
6,391.8
Source: Euromonitor International, 2014
2014-18
CAGR*
1.7%
3.1%
1.4%
2.3%
1.3%
*CAGR: Compounded Annual Growth Rate
There were 710 new drinking milk products launched in the five key European markets from January
2013 to December 2013. Of the new products that were launched for that year, 163 were in Germany,
153 in Italy, 153 in Spain, 140 in the United Kingdom and 111 in France.
New Launches of Drinking Milk Products in Key European Markets in 2013
200
163
153
150
143
140
111
100
50
0
Germany
Italy
Spain
UK
France
Source: Mintel GNPD, 2014
Page | 10
New Launches of Drinking Milk Products by Sub-Category in Key European Markets in 2013
Category
Spain
40.5%
33.3%
42.0%
44.3%
48.6%
41.3%
17.8%
61.4%
42.7%
16.4%
33.3%
34.4%
39.3%
5.2%
12.6%
32.1%
13.5%
21.1%
Sweetened Condensed Milk
0.6%
0.0%
2.1%
3.6%
3.6%
1.8%
Evaporated Milk
1.8%
0.0%
0.7%
3.6%
0.9%
1.4%
Flavoured Milk
UK
France
Total
Sample
Italy
Drinking Yogurt & Liquid Cultured
Milk
White Milk
Germany
Source: Mintel GNPD, 2014
Over the 12 month period of 2013, drinking Yogurt and liquid cultured milk saw the highest activity,
accounting for 41.3% of all product launches in the 5 key markets, followed by white milk with 34.4% and,
flavoured milk accounted for 21.1%.
France leads for most new products in the drinking milk products sector, followed by the U.K and
Germany, while white milk innovation is led by Italy, followed by Spain and France. Germany also leads
for new products launches in flavoured milk category.
New Product Launches of Drinking Milk Products by Claim in Key European Markets in 2013
Low/No/Reduced Fat
Ethical - Environmentally Friendly
Package
No Additives/Preservatives
31.9%
54.2%
41.3%
44.3%
31.5%
Total
Sample
41.0%
25.8%
28.1%
26.6%
57.9%
36.9%
34.5%
12.9%
13.7%
6.3%
40.0%
28.8%
19.6%
Low/No/Reduced Allergen
10.4%
17.0%
38.5%
12.9%
4.5%
17.0%
Vegetarian
2.5%
2.6%
0.0%
64.3%
0.0%
13.8%
Claim
Germany
Italy
Spain
UK
France
Source: Mintel GNPD, 2014
Low fat/no/reduced fat is the leading product claim in the key European Market: 63.5% of the new low fat
products were launched in the white milk category, followed closely by evaporated milk with 40.0%.
Environmentally-friendly packaging, most often recyclable materials such as cartons, has become very
important in many markets. The U.K. has seen 57.9% of recent dairy drinks launched with this claim,
followed by France 36.9% and Italy 28.1%.
No additives/preservatives is the top claim in the drinking Yogurt category. The U.K. was leading here,
with 40% of new product launches with this claim.
Page | 11
New Product Launches of Drinking Milk Products by Sub-Category and Claim in Key European
Markets in 2013
Drinking
Yogurt &
Liquid
Cultured
Milk
Claim
White
Milk
Flavoure
d Milk
Sweetened
Condensed
Milk
Evaporat
ed Milk
Total
Sample
Low/No/Reduced Fat
Ethical - Environmentally
Friendly Package
No additives
/Preservatives
31.7%
63.5%
25.3%
7.7%
40.0%
41.0%
22.5%
46.3%
36.7%
30.8%
70.0%
34.5%
30.4%
5.3%
23.3%
15.4%
0.0%
19.6%
Low/No/Reduced Allergen
16.7%
18.0%
16.7%
15.4%
10.0%
17.0%
Vegetarian
17.1%
4.5%
19.3%
30.8%
40.0%
13.8%
Source: Mintel GNPD, 2014
Historic and Forecast of Milk Retail unit prices in US$ per Litre
Country
France
Germany
Italy
Spain
UK
2009
1.4
0.8
1.6
1.0
1.2
2010
1.3
0.8
1.5
1.0
1.1
2011
1.4
0.9
1.6
1.0
1.1
2012
1.3
0.9
1.5
0.9
1.1
2013
1.3
0.9
1.5
0.9
1.1
2014F
1.3
1.0
1.6
0.9
1.1
2015F
1.3
0.9
1.5
0.9
1.1
2016F
1.3
1.0
1.5
0.9
1.2
2017F
1.4
1.0
1.5
0.9
1.2
Source: Mintel GNPD, 2014
Top Five Company and Their Market Share in the Milk and Milk Drinking Products in 2013
Company
Germany
Italy
Spain
UK
France
Total
Sample
Danone
3.7%
2.6%
9.8%
7.1%
2.7%
5.2%
Lidl
4.3%
6.5%
4.2%
0.0%
0.9%
3.4%
Carrefour - CMI
0.0%
0.0%
0.0%
0.0%
17.1%
2.7%
Tesco
0.0%
0.0%
0.0%
13.6%
0.0%
2.7%
Molkerei Alois Müller
9.8%
1.3%
0.0%
0.0%
0.0%
2.5%
Source: Mintel GNPD, 2014
The drinking milk products category is fragmented in Europe with the top ten players accounting for about
65% of total sales value and among the local modern grocery retailers.
In most European countries, modern grocery retailers adopted mid-priced private label milk and drinking
milk products for the most part. The sophistication of their product offers via trendy labels, such as “local
sourcing”, “organic”, “support for regional farms” are coupled with aggressive pricing competition, thus
having the largest market share.
Another new development observed by Mintel is the move towards the subcategories of flavoured,
lactose-free and organic drinking milk products adopted by private label in the majority of the European
market a strategy which some players have opted for in order to generate value.
Page | 12
Yogurt and sour milk
(This is the aggregation of Yogurt and sour milk drinks.)
According to Mintel data, 56% of Western European consumers view Yogurt as a guilt-free snack. This
can be easily explained by the perceived healthy product benefits and wide variety of flavours. The shift
of Yogurt from being solely a breakfast or dessert option to a snack product happened thanks to its
versatility and successful combination with healthy ingredients such as cereals, grains, nuts, etc.
Top Ten Yogurt and Sour Milk Products Markets in the World in 2014* in US$ Billions, Current
Prices – Fixed 2014 Exchange Rates
12.0
Retail Value Sales (US$ billion)
10.3
10.0
8.7
8.0
6.1
6.0
3.6
4.0
3.5
3.1
2.5
2.4
2.3
Spain
Italy
2.0
1.8
0.0
China
USA
Brazil
Germany France
United Canada
Kingdom
Mexico
Source: Euromonitor International, 2014.* 2014 figures are provisional and based on part-year estimates.
Stagnation of value sales in 2013 is signalling the maturity of European markets of yogurt and sour milk
products. These products benefits from high levels of trust in their health credentials, being seen as guiltfree treats, their affordability and the presence of a number of big-hitting brands such as Danone.
However, rising prices have seen the value of the market continue to grow in the U.K and experience
anemic growth in France.
Historic Retail Value Sales of Yogurt and Sour Milk Products in Key European Markets, in US$
Millions and Period Growth (%), Current Prices – Fixed 2013 Exchange Rates
Country
France
Germany
Italy
United Kingdom
2009
3,382.2
3,673.7
2,522.5
2,633.5
Source: Euromonitor International, 2014
2010
2011
3,420.6
3,705.4
2,485.0
2,773.4
3,474.4
3,610.0
2,533.2
2,856.4
2012
3,436.6
3,521.3
2,563.3
2,941.6
2013
3,427.0
3,526.4
2,434.7
3,030.9
2009-13
CAGR*
0.3%
-1.0%
-0.9%
3.6%
*CAGR: Compounded
Page | 13
Health and wellness is an important trend affecting the category. In spoonable yogurt, a shift from
flavoured to fruited and plain spoonable yogurt can be observed, which can be explained by the fact that
the latter two types are considered healthier. Plain spoonable yogurt is even expected to see the best
performance within yogurt and sour milk products.
Forecast Retail Value Sales of Yogurt and Sour Milk Products in Key European Markets, in US$
Millions and Period Growth (%), Current Prices – Fixed 2013 Exchange Rates
Country
2014
2015
2016
2017
2018
France
Germany
Italy
Spain
United Kingdom
3,452.3
3,579.8
2,311.4
2,412.4
3,063.4
3,456.3
3,601.4
2,249.5
2,389.6
3,033.8
3,470.6
3,621.5
2,221.8
2,399.9
3,011.1
3,491.3
3,631.6
2,214.9
2,436.9
2,997.6
3,520.4
3,659.5
2,219.3
2,491.4
2,984.2
Source: Euromonitor International, 2014
2014-18
CAGR*
0.5%
0.6%
-1.0%
0.8%
-0.7%
*CAGR: Compounded
There were 1338 new yogurt and sour milk products launched in the five key European markets from
January 2013 to December 2013. Of the new products that were launched for that year, 370 were in
Germany, 293 in France, 249 in the U.K and 215 in Italy.
New Product Launches of Yogurt and Sour Milk Products in Key European Market in 2013
400
370
350
293
300
249
250
215
211
Italy
Spain
200
150
100
50
0
Germany
France
UK
Source: Mintel GNPD, 2014
Germany has the highest number of launches among the key European markets. The country accounts
for the highest number of introductions of spoonable yogurt with 82.2% of 370 new product introduced in
2013 in this category.
New Launches of Yogurt and Sour Milk Products by Category in Key European Market in 2013
Germany
France
UK
Italy
Spain
Spoonable Yogurt
82.2%
81.6%
75.1%
76.3%
71.6%
Total
Sample
78.1%
Sour Milk
17.8%
18.4%
24.9%
23.7%
28.4%
21.9%
Category
Source: Mintel GNPD, 2014
Page | 14
Penetration of spoonable yogurt is highest in Germany and lowest in Spain. However, in contrast, daily
consumption of sour milk drinks is low in Germany and much higher in Spain; a large proportion
of Germans consume these products only occasionally. Eating spoonable yogurt is much more common.
New Product Launches of Yogurt and Sour Milk Products by Claim in Key European Markets in
2013
Germany
France
UK
Italy
Spain
No Additives/Preservatives
24.1%
32.8%
30.1%
29.3%
11.8%
Total
Sample
26.0%
Low/No/Reduced Fat
Ethical - Environmentally
Friendly Package
Vegetarian
11.4%
20.1%
42.2%
29.8%
25.1%
24.1%
8.9%
33.8%
39.8%
5.1%
3.3%
18.6%
0.8%
1.4%
70.3%
1.4%
0.5%
13.9%
Low/No/Reduced Allergen
9.7%
3.1%
9.6%
14.4%
33.6%
12.8%
Claim
Source: Mintel GNPD, 2014
“No Additives/preservatives” is the leading product claim in the launched from the five key markets: 26%
of “no additives/preservatives” products are launched in the Yogurt and sour milk category followed
closely by “low/no/reduced fat” products with 24.1%.
New Launches of Yogurt and Sour Milk Products by Claim and Category in Key European Markets
in 2013
Claim
Spoonable Yogurt
Sour Milk
Total Sample
No Additives/Preservatives
24.8%
30.4%
26.0%
Low/No/Reduced Fat
Ethical - Environmentally Friendly
Package
Vegetarian
22.0%
31.7%
24.1%
17.5%
22.5%
18.6%
13.0%
17.1%
13.9%
Low/No/Reduced Allergen
11.7%
16.7%
12.8%
Source: Mintel GNPD, 2014
Over the review period, top innovator Danone, has been most active in Spain and Germany. The
company operates almost exclusively in the yogurt sector. Müller Group is the largest private dairy
company in Germany with several powerful brands. Muller yogurt and sour milk products holds the
second positions in Germany behind the powerful Danone brand.
Top Company of Yogurt and Sour Milk Products in Key European Markets in 2013
12.4%
8.2%
10.0%
5.6%
16.6%
Total
Sample
10.6%
Lidl
4.9%
1.0%
0.8%
7.9%
8.5%
4.3%
Molkerei Alois Müller
7.0%
0.0%
0.0%
6.5%
0.0%
3.0%
Yoplait
0.0%
10.2%
4.0%
0.0%
0.0%
3.0%
Tesco
0.0%
0.0%
13.3%
0.0%
0.0%
2.5%
Company
Danone
Germany
France
UK
Italy
Spain
Source: Mintel GNPD, 2014
Page | 15
Yogurt: Retail market volume consumption in Kilogram per capita (population)
Country
France
Germany
Italy
Spain
UK
2008
19.5
16.6
6.8
17.4
10.9
2009
19.1
16.2
7.1
17.7
11.0
2010
20.0
16.6
7.2
17.8
11.1
2011
19.8
16.7
7.4
18.2
10.8
2012
19.6
16.2
7.5
18.0
10.5
2013
19.5
15.9
7.8
17.9
10.5
F
2014
19.5
15.9
8.0
18.2
10.4
F
F
2015
19.6
15.5
8.1
18.3
10.2
2016
19.6
15.2
8.3
18.6
10.1
F
2017
19.7
15.1
8.5
19.0
10.0
F
2018
19.9
14.8
8.6
19.1
9.8
Source: Mintel GNPD, 2014. F=Forecast
The ‘Big 5’ listed in the table above, showed differing trends in yogurt consumption depending on market
saturation and competitive strategies. The market in Germany is showing a slight decline in consumption
as a result of the decline in population.
Respondents to a Mintel survey on yogurt and sour milk products in the five key European market who
choose yogurts or sour milk products based on low price or special promotions are most likely to believe
that private label products are just as good as brand names. This indicates, according to Mintel, that there
is an opportunity for private label manufacturers to win market share if they can compete aggressively
on price. However, Mintel notes that while consumers in these key countries are aware
of price differences between brands, they are not actively taking greater steps to save money when
buying yogurt.
Yogurt: Retail Market Unit Prices in US$ per Kilogram
Country
France
Germany
Italy
Spain
UK
2008
3.0
3.4
5.7
3.9
4.5
2009
2.8
3.2
5.3
3.5
4.0
2010
2.6
2.9
5.0
3.2
3.9
2011
2.7
2.9
5.3
3.4
4.3
2012
2.5
2.7
4.8
3.1
4.5
2013
2.6
2.8
4.9
3.2
4.5
F
2014
2.7
3.0
5.0
3.2
4.9
F
2015
2.5
2.8
4.7
3.1
5.0
F
2016
2.5
2.7
4.8
3.1
5.1
F
2017
2.5
2.7
4.8
3.1
5.4
F
2018
2.5
2.6
4.8
3.2
5.5
Source: Mintel GNPD, 2014. F=Forecast
Other Dairy
(This is the aggregation of chilled and shelf stable desserts, chilled snacks, coffee whiteners,
condensed/evaporated milk, cream, and fromage frais and quark.)
International dessert specialities and other premium dessert products, which already have a strong
presence in foodservice channels, have begun to make their way onto the shelves of grocery retailers in
most of the E.U. countries. Products such as tiramisu, mousse au chocolat or crème brulée are offered by
a growing number of manufacturers and grocery retailers’ private labels and are creating growing
consumer interest. Classical desserts such as pudding or rice pudding however, still dominate the market.
Page | 16
Historic Retail Value Sales of Other Dairy Products in Key European Markets, in US$ Millions and
Period Growth (%), Current Prices – Fixed 2013 Exchange Rates
Country
2008
2009
2010
2011
2012
2013
Germany
France
United Kingdom
Spain
Italy
4,720.5
4,155.5
1,593.0
1,294.6
959.9
4,719.2
4,255.9
1,631.2
1,242.6
929.3
4,657.5
4,345.8
1,672.9
1,190.0
938.3
4,716.1
4,426.4
1,738.0
1,197.0
958.2
4,808.5
4,472.0
1,793.0
1,255.4
966.3
4,858.2
4,515.0
1,810.8
1,245.0
965.1
Source: Euromonitor International, 2014
2008-13
CAGR*
0.6%
1.7%
2.6%
-0.8%
0.1%
*CAGR: Compounded
Retail value sales of other dairy products are expected to perform well to 2018. While organic products
according to Euromonitor, are predicted to see a strong performance, conventional dairy-based products
will see a slight decline. Euromonitor also notes that soy-based dessert will have its growth mainly driven
by consumers showing more interest in alternative dairy products, especially for health reasons, such as
lactose intolerance.
Forecast Retail Value Sales of Other Dairy Products in Key European Markets, in US$ Millions and
Period Growth (%), Current Prices – Fixed 2013 Exchange Rates
Country
2014
2015
2016
2017
2018
Germany
France
United Kingdom
Spain
Italy
4,912.0
4,590.1
1,823.8
1,245.6
965.9
4,975.8
4,692.5
1,847.1
1,272.1
986.4
5,047.1
4,808.2
1,880.1
1,300.6
1,011.2
5,134.9
4,939.6
1,920.6
1,331.6
1,043.7
5,233.8
5,086.6
1,966.7
1,369.8
1,079.7
Source: Euromonitor International, 2014
2014-18
CAGR*
1.6%
2.6%
1.9%
2.4%
2.8%
*CAGR: Compounded
The growth will be sustained by the greater trend of home-cooking by European households. This trend
will also be fuelled by the diversified applications of other dairy products such as in sauces, dips, soups,
gratin, quiche and desserts.
DISTRIBUTION
Along with North America and Japan, Western Europe has one of the world's most modern retail
landscapes. Traditional store formats and open markets only play a minor role in Western European food
retailing. Traditional markets can still be found in markets such as Spain, Portugal and southern Italy,
while there are very few in Northern Europe, including Germany, the U.K. and Scandinavia. Germany,
France and the U.K. constitute the largest markets for modern grocery retailing, whereas, France,
the U.K. and Italy constitute the largest markets for the hotel, restaurants and catering sector according to
Planet Retail.
At the food supply chain level, Western Europe's structure is unique and complex. The market is
fragmented and the numbers of suppliers are so few that the actions of one could affect price and have a
measurable impact on competitors. Food and drink companies face considerable pressure from retailers,
especially discounters, on product prices, and will continue to see a growing presence of private label
products, magnifying competition on price in the market.
Page | 17
In addition Planet Retail notes that because its high levels of market concentration, Western Europe has
one of the world's most modern retail landscapes, with many avant-garde trends and formats that are said
to be around a few years ahead of North America. Of late, the retail sector has been highly influenced by
shopper-centric trends and efforts toward range rationalization, as a wide array of grocery retailers cut
back on Stock Keeping Units (SKUs) to improve shopper convenience and increase efficiency. The
economic uncertainties has had a dramatic effect on consumer behavior, with value-for-money becoming
a driving force and ultimately leading retailers to become more sophisticated and selective, which has, in
turn, affected suppliers worldwide.
Increasingly, retailers are engaging with shoppers directly through private label development, which is
driving loyalty and gaining higher margins. As the private label trend grows in Western Europe, suppliers
will either face strong challenges in competing with them or see major opportunities if they choose to
supply them.
Dairy Product Distribution in Western Europe by Format and %
Outlets
Store-Based Retailing
Grocery Retailers
Modern Grocery Retailers
Convenience Stores
Discounters
Forecourt Retailers
Hypermarkets
Supermarkets
Traditional Grocery Retailers
Food/drink/tobacco specialists
Independent Small Grocers
Other Grocery Retailers
Non-Grocery Retailers
Health and Beauty Retailers
Mixed Retailers
Other Non-Grocery Retailers
Non-Store Retailing
Source: Euromonitor International, 2014
2009
98.9
97.6
87.0
5.0
17.2
1.3
23.0
40.5
10.5
1.8
6.0
2.8
1.3
0.1
0.8
0.4
1.1
2010
98.8
97.5
87.2
5.1
17.3
1.3
23.0
40.4
10.3
1.8
5.8
2.7
1.3
0.1
0.8
0.4
1.2
2011
98.7
97.4
87.5
5.1
17.5
1.3
23.2
40.4
9.9
1.7
5.5
2.6
1.3
0.1
0.8
0.4
1.3
2012
98.6
97.3
87.6
5.2
17.5
1.3
23.3
40.3
9.7
1.7
5.4
2.6
1.3
0.0
0.8
0.5
1.4
2013
98.5
97.2
87.7
5.2
17.7
1.3
23.2
40.3
9.4
1.6
5.3
2.5
1.4
0.0
0.8
0.5
1.5
2014*
98.4
97.0
87.9
5.2
17.8
1.2
23.4
40.2
9.1
1.6
5.1
2.5
1.4
0.0
0.9
0.5
1.6
*Forecast
Supermarkets and hypermarkets are the most popular distribution channels in Western Europe. This
category accounted for 98.4% of distribution shares and consists of retailers such as Carrefour, Auchan,
Tesco, Metro Group and Schwarz Group.
Company
Carrefour
Metro Group
Tesco
Schwarz Group
Auchan
Edeka
Europe's Top Retailers
Description
A French-based operator of hypermarkets, supermarkets and discount stores
A German-based company largely relying on its cash and carry, hypermarket and
consumer electronics store networks
A British market leader with several foreign operations outside Western Europe
Owner of the fast-expanding Lidl and Kaufland chains
Another French multi format specialist
A German market leader that has increasingly been focusing on its home market
operations
Source: Planet Retail, 2014
Page | 18
Buying groups
According to Planet Retail, most independent retailers that continue to exist in Western Europe are
organized in buying groups, such as Edeka, Rewe, Intermarché, or the numerous co-operative societies
active in the region. It is difficult, in the Western European market, for independent traders to compete on
price with the larger companies. For this reason, traders tend to join buying organizations, except in the
very small upmarket niches. Alidis/Agenor are two buying centers working under common European
distribution companies: Centros Commerciales Ceco S.A (Eroski), Zentrale AG & Co (Edeka) and ITM
Entreprise S.A (les mousquetaires).
FOR MORE INFORMATION
International Trade Commissioners can provide Canadian industry with on-the-ground expertise
regarding market potential, current conditions and local business contacts, and are an excellent point of
contact for export advice.
• Find a Trade Commissioner
www.tradecommissioner.gc.ca/eng/find-trade-contacts.jsp
For additional intelligence on this and other markets, the complete library of Global Analysis reports can
be found under Statistics and Market Information at the following link, arranged by sector and region of
interest:
•
ats-sea.agr.gc.ca
Presentations and reports on the European Dairy Sector are available from the conference website;
•
•
•
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2013:086:0007:0011:EN:PDF
http://ec.europa.eu/agriculture/milk/milk-package/index_en.htm
http://ec.europa.eu/agriculture/events/dairy-conference-2013_en.htm
RESOURCES
Euromonitor International, 2010. Got Milk? Mapping Dairy Supply Chain in the Developed World.
Euromonitor International, 2014. Dairy Western Europe.
Euromonitor International, 2014. Cheese in France, Germany, Italy, Spain and UK.
Euromonitor International, 2014. Drinking Milk Products in France, Germany, Italy, Spain and UK.
Euromonitor International, 2014. Yoghurt and Sour Milk Products in France, Germany, Italy, Spain and
UK.
Euromonitor International, 2014. Other Milk products in France, Germany, Italy, Spain and UK.
Mintel Global New Products Database, 2014. Dairy Products in Western Europe.
Mintel Inspire 2014 Stats, European Consumers await next Generation of Functional Dairy Drinks.
CNIEL, Information ressources Inc., Economist Intelligence Unit - http://www.eiu.com/, Mintel.
Page | 19
The Nielsen Company, BMELV, BMF, DeStatis, BLE, Economist Intelligence Unit - http://www.eiu.com/,
Trade Interviews, Mintel.
CLAL, ISMEA, Economist Intelligence Unit - http://www.eiu.com/, Trade Interviews, Mintel.
InfoScanCensusTM, IRI España, MARM, Economist Intelligence Unit - http://www.eiu.com/, Mintel.
Information Resources, Inc., Economist Intelligence Unit - http://www.eiu.com/, Mintel.
International Dairy Federation: www.fil-idf.org/
Canadian Dairy Commission: www.dairyinfo.gc.ca
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Dairy Products in Western Europe
Global Analysis Report
Prepared by: Karim Zarrouki, Market Analyst
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