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Hamish Renton of HRA Associates looks ahead at what's happening in the Dairy Market for 2014. He looks at the commodity market and how the GDT is effectively becoming the world stock exchange for the Dairy Market. Hamish also looks at flavoured Milk category and the Cheese market and Jess House, analyst at HRA, talks about what the future holds for the Butter Industry
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Dairy Market 2013-14
The Commodities Market
• GDT becoming world stock exchange for dairy
• Butter, whey, cheddar, SMP all being traded internationally
• Dairy prices are increasingly being set by the GDT
Mergers and Acquisitions in Dairy
• Big changes in own label cheese
Flavoured Milk
Protein drinks• Historically drinks made up
at home
• Now moving towards ready to drink
Flavoured Milk Cont.
• Value sales up 9.3%
• Volume sales up 5.6%
• Total category - £119m
Why?• Lots of new entrants to
market• Promotions in store
Capacity Balance
• Too little milk, processing assets not utilised
• Too much milk, unable to process.
• Milk supply affected by weather, seasonality, demand and prices
Butter
• Arla moved production to Westbury (Anchor)• Muller Wiseman opened up in Market Drayton• Dairy Crest moved butter packing into Kirby
Butter Cont.
• British Provenance increasingly being used to inspire brand loyalty
• Value sales of diet spreads down 4.1% due to fear of additives and E numbers
• Opportunity for healthy, natural spreads
Fresh, Doorstep and UHT Milk
• UHT sales down
• Doorstep milk down
• Fresh milk up - £5.2bn, volume growth 1.5%
Milk Cont.
• Explosive growth in Lactose Free
• Yoghurt, butter, milk, cream
Milk Cont.
• Massive investment in liquid milk:– Severnside, Dairy Crest– Aylesbury, Arla– Muller Wiseman
Quotas in 2014Abolition in 2015
Market tightens in responseWill the UK have enough milk supply to
respond?
Looking to 2014
HRA – The Dairy Specialists
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Milk Supply
Processors
Retailers
Consumers
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• Projects require bespoke, tailored solutions.Our specialisms include:
Dairy Consultancy Category Management
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