In recent years there have been several brand innovations in the milk market which, prior to the disbanding of the Milk Marketing Boards of England and Wales (MMBEW) in 1994, had little motivation to invest in brands.
Last week, Dairy Crest revealed it is poised to rebrand its milk lines under the Country Life banner, with the aim of better competing against Cravendale, the fast-growing Arla-owned brand, and discount retailers such as Aldi and Lidl (MW last week).
The development of brands is a relatively recent thing for the UK milk market. Before 1994, the MMBEW, a public body formed in 1933 to control the production and distribution of milk in the UK, held the rights to purchase all milk sold wholesale from farms in England and Wales. The body ran campaigns such as Milk’s Gotta Lotta Bottle, created by BMP DDB (now DDB) in 1982, and Nice Cold, Ice Cold Milk, which were so popular their straplines became British catchphrases.
Peter Dawson, policy director of Dairy UK, the industry’s trade association, says: “Industry margins were effectively guaranteed with the milk marketing scheme, so there was little or no incentive to engage in differentiation.” He adds that price deregulation in 1984 led to the decline in doorstep milk deliveries and the industry responded by investing in production for delivery to shops rather than bottling. But because supermarkets insisted on own-label, the UK ended up with no brands.
UK retail sales of milk, including flavoured milk and cream, were worth £3.1bn in 2007, increasing from £2.65bn in 2003, according to Mintel. The majority is accounted for by sales of white milk – £2.77bn in 2007. The market is dominated by Arla, which has a 46% share with its combined own-label and branded milk. Dairy Crest (which began life as the milk processing arm of the MMBEW) has a 21% share, and Robert Wiseman Dairies 27%.
While the market is heavily driven by own-label production and retailer relationships, brands with specific characteristics, such as the dairy-free Alpro and organic Yeo Valley, have achieved some success. .
Milking the product benefits But it is Arla’s Cravendale that has seen the most impressive growth, rising from 2.8% of the market in 2006 to 3.3%, worth £91m, last year. Cravendale marketing director Louise Barton says: “Growth in the past couple of years has been born out of the fact that we realised although we talk about milk every day, shoppers just aren’t that interested. We aimed to jolt them out of their apathy and get them to re-evaluate their relationship with the category, using the Milk Matters platform.”
Cravendale has focused on what it claims are genuine product benefits – it uses a filtration process that makes it purer and causes it to last longer. Advertising campaigns created by Wieden & Kennedy have driven home the message that Cravendale is different from other milks.
Barton, who previously worked on bread brand Warburtons, likens the milk market to that of bread before it reached its present maturity. “There was a time,” she says, “when consumers thought bread was bread was bread. Milk has a similar model.”
Though some consumers are starting to believe that not all milk is the same and some brands are gaining a foothold, experts warn brand development will run into problems because of the difficulties being imposed on retailers by the credit crunch.
Dawson points out that the large supermarkets have to fend off the challenge that is coming from the discounters, which stock standardised products. A move by retailers to simplify their ranges, concentrating on value, will put some of the niche products under considerable pressure.