Dairy Market Trends
Ouch! Several of the top 10 brands of low-fat and skim milk are really getting pinched in the retail market, while a couple of exceptions are gaining ground. Yogurt sales figures look better every time you glance at them and American cheese may be rebounding in terms of units, although dollar sales continue to slip. Meanwhile, the pace of the exponential growth of soymilk is just starting to slow a little bit.
First let's look at low-fat and skim milk. The entire category was down more than 4% for the 52 weeks ended April 20. Kemps, Deans, and Mayfield suffered double-digit losses during the period. Horizon Organic and Garelick, meanwhile scored significant gains. Including private label, seven of the top 10 brands sold fewer units than in the prior year. But private label lost less ground than the others. It could be that consumers were bargain shopping, the exception being those willing to fork over a premium for truly differentiated products like Horizon Organic and Lactaid 100. And even Lactaid took a hit in the unit sales column.
These figures, from Information Resources Inc., represent supermarket, drug store, and mass merchandisers' sales but do not include Wal-Mart.
And then there's yogurt. You might notice that there are no minus symbols in the table showing the five most recent quarters of retail yogurt sales. Dollar sales were up 8.2% in the first quarter of 2002, which was nice. They jumped to 9.4% in the second quarter and then they really took off. Dairy's most healthful segment experienced double-digit dollar sales in each of the past three quarters, through March 30.
Back in April we checked on the top 10 brands of yogurt and found that there was a lot of jockeying among the brands in 2002, with some of the top brands actually losing sales as the segment surged overall. These most recent figures confirm that there is plenty of potential for regional brands and new entrants.
A look at quarterly sales of American cheese in all forms offers some comfort to cheesemakers. While sales were down throughout most of 2002, the last two periods have yielded positive numbers, at least in the unit sales column. If lower prices are being passed on to consumers, those consumers may be responding to the bargains. These figures are compared to the same period, prior year, so seasonal patterns are accounted for. Keep in mind that the numbers don't reflect foodservice sales.
Soymilk is a category of vital interest to dairy processors, and one whose rapid growth (albeit from a small base) has attracted a good deal of attention. IRI includes kefir and milk substitutes in the subcategory, but it's safe to say refrigerated soymilk (shelf-stable products are not included here) makes up the bulk of this. Quarterly sales through March 30 indicated some deceleration in the phenomenal pace of refrigerated soymilk. Sales were growing by more than 50% in terms of both units and dollars back in the first quarter of 2002. A year later that growth is down to a mere 20% in the unit column. Obviously there's still plenty of opportunity, especially for the innovative manufacturer.