Milk - US

Published by: Mintel International Group Ltd.

Published: Jun. 1, 2007 - 117 Pages

Table of Contents

Scope and Themes

What you need to know

Definition

Abbreviations and terms

Abbreviations

Executive Summary

Market at a glance

Households with children and Hispanic households sustain the market

Most segments exhibit decline at FDM

Private labels—the biggest supplier in the market

Channel changing—milk declines in supermarkets but grows in mass and convenience

Advertising—milk as a weight loss option

The consumer

Nearly every household drinks milk

Low-fat the favorite, but whole not far behind

Types of milk consumed vary by race/ethnicity

Parents recognize the benefit of milk, but don’t always practice what they preach

Consumption with cereal the most likely use of milk

Supermarkets the top source of milk purchases, but Wal-Mart not far behind

Consumers concerned about growth hormones, but unlikely to change purchase behavior

A third of infrequent drinkers just don’t like milk

Functional milk—an effective strategy to compete with other beverages

Future—increasing milk prices again?

Market Drivers

Mature market

Decrease in per capita consumption suppresses growth

Figure 1: Per capita consumption of milk in the U.S., by type, 2000-05

Growth in population

Figure 2: U.S. population and projections, by age, 2001-11

Increased penetration in under-penetrated channels

Quick-service restaurants contribute to the popularity of single-serve milk

Milk growth in convenience stores and vending channel

School policies discourage milk growth in schools

Figure 3: Prevalence of obesity among children aged 6-19 years, 1976-2004

Organic milk drives growth

Competition from other non-alcoholic beverages

Figure 4: Per capita consumption of carbonated beverages, bottled water and sports drinks, 2000-05

Competition from yogurt

Households with children influence milk market

Figure 5: Volume of milk consumed, by presence of children in the household, January-October 2006

Figure 6: Number of children in households, 2001-06

Children gravitate towards other RTD non-carbonated beverages

Figure 7: Volume of milk consumed, by presence of children in the household, 2002 and 2006

Figure 8: Kids’ preference for milk, 2002, 2004 and 2006

Hispanic households drive growth, but black and Asians also important

Figure 9: Volume of milk consumed, by race/ethnicity, January-October 2006

Figure 10: Average household size, by race/Hispanic origin of householder, 2001 and 2006

Market Size and Trends

Market size

Figure 11: Total U.S. retail sales of milk, at current and constant prices, 2001-06

Figure 12: FDM* volume sales and prices of milk, 2001-06

Wal-Mart estimate

Market trends

New product introductions on the rise

Figure 13: New milk product introductions, 2001-07

Flavor trends

Figure 14: Number of new milk introductions, by flavor, 2001-07

Market Segmentation

Introduction

Figure 15: FDM sales of milk, by type, 2004 and 2006

Refrigerated low-fat/non-fat

Figure 16: FDM sales of refrigerated low-fat and non-fat milk, at current and constant prices, 2001-06

Figure 17: FDM volume sales and prices of low-fat and skim milk, 2001-06

Refrigerated whole milk

Figure 18: FDM sales of refrigerated whole milk, at current and constant prices, 2001-06

Figure 19: FDM volume sales and prices of whole milk, 2001-06

Figure 20: Household consumption of milk by type, by race/ethnicity, January-October 2006

Refrigerated flavored milk/eggnog/buttermilk

Figure 21: FDM sales of refrigerated flavored milk/eggnog/buttermilk, at current and constant prices, 2001-06

Kefir/milk substitutes/soymilk

Figure 22: FDM sales of kefir/milk substitutes/soymilk, at current and constant prices, 2001-06

Figure 23: Attitude towards milk and milk alternatives, by age, April 2007

Evaporated/condensed milk

Figure 24: FDM sales of evaporated/condensed milk, at current and constant prices, 2001-06

Milkshakes/non-dairy drinks

Figure 25: FDM sales milkshakes/non-dairy drinks, at current and constant prices, 2001-06

Supply Structure

Companies and brands

Figure 26: FDM sales of major manufacturers in the milk market in the U.S., 2004 and 2006

Refrigerated low-fat/non-fat

Figure 27: Selected brand sales and market share of refrigerated low-fat and non-fat milk at FDM in the U.S., 2004 and 2006

Refrigerated whole milk

Figure 28: Selected brand sales and market share of refrigerated whole milk at FDM in the U.S., 2004 and 2006

Refrigerated flavored milk/eggnog/buttermilk

Figure 29: Selected brand sales and market share of refrigerated flavored milk/eggnog/buttermilk at FDM in the U.S., 2004 and 2006

Kefir/milk substitutes/soymilk

Figure 30: Selected brand sales and market share of kefir/milk substitutes/soymilk at FDM in the U.S., 2004 and 2006

Advertising and Promotion

National processors’ organizations

Body by Milk—teens encouraged to trade soda for milk

Got milk?—a message to mom about childhood obesity

Figure 31: Got Milk?, TV ad, 2006

24/24 milk

Figure 32: 2424 milk and weight loss, TV ad, 2006

Suppliers

White Wave Foods Company

Figure 33: Silk Soymilk, TV ad, 2006

HP Hood

Figure 34: Hood hormone-free milk, TV ad, 2006

Retail Distribution

Introduction

Figure 35: U.S. retail sales of milk, by channel, 2004 and 2006

Supermarkets

Figure 36: U.S. supermarket sales of milk, at current and constant prices, 2001-06

Mass and other

Figure 37: U.S. mass and other* channels sales of milk, at current and constant prices, 2001-06

Figure 38: Number of regular stores and supercenters opened by Wal-Mart, FY 2001-06

Convenience stores

Figure 39: U.S. convenience stores sales of milk, at current and constant prices, 2001-06

Drug stores

Figure 40: U.S. drug stores sales of milk, at current and constant prices, 2001-06

Vending

Figure 41: U.S. vending sales of milk, at current and constant prices, 2001-06

Natural channel/SPINS

Figure 42: Natural product supermarket retail sales of milk and milk substitutes, at current and constant prices, 2004-06

Natural channel sales by segment

Figure 43: Natural product supermarket retail sales of milk, by segment, 2004-06

Organic leads non-organic

Figure 44: Natural product supermarket retail sales of dairy milk by organic/non-organic, 2004-06

Shelf stable losing lead over refrigerated

Figure 45: Natural product supermarket retail sales of non-dairy beverages, by storage, 2004-06

Manufacturers and brands

Brand sales: milk

Figure 46: Manufacturer and brand sales of milk in natural supermarkets, 2004 and 2006

Brand sales: non-dairy beverages

Figure 47: Manufacturer brand natural supermarket sales of non-dairy beverages, 2004 and 2006

The Consumer—Household Consumption of Milk

Introduction

Summary

Household consumption

Household usage of milk

Figure 48: Household consumption of milk, 2002, 2004 and 2006

Figure 49: Household consumption of milk, by household size, January-October 2006

Types of milk consumed

Figure 50: Types of milk consumed, 2002, 2004 and 2006

Figure 51: Household consumption of milk by type, by presence of children in household, January-October 2006

Figure 52: Household consumption of milk by type, by race/ethnicity, January-October 2006

Volume of milk consumed

Figure 53: Volume of milk consumed, 2002, 2004, and 2006

Figure 54: Volume of milk consumed, by age of head of household, January-October 2006

Figure 55: Volume of milk consumed, by race/ethnicity, January-October 2006

Household use of milk flavorings

Figure 56: Household use of milk flavoring, 2002, 2004 and 2006

Volume of flavored milk consumed

Figure 57: Volume of flavored milk consumed, by race/ethnicity, January-October 2006

Brands of milk flavoring used

Figure 58: Brands of milk flavoring used, by presence of children in the household, January-October 2006

The Consumer—Adult Consumption of Milk

Introduction

Summary

Adult incidence of drinking milk

Figure 59: Adult consumption of milk, by selected demographics, April 2007

How milk is used

Figure 60: How milk is used, by gender, April 2007

Figure 61: How milk is used, by gender, April 2007

Figure 62: How milk is used, by age, April 2007

Figure 63: How milk is used, by race/ethnicity, April 2007

Figure 64: How milk is used, by presence of children in the household, April 2007

The Consumer—Kids’ and Teens’ Consumption of Milk

Introduction

Summary

Kids’ preference for milk and milk alternatives

Figure 65: Kids’ preference for milk and milk alternatives, 2002-06

Kids’ usage of milk flavorings

Figure 66: Kids’ milk flavoring usage frequency, 2002-06

Teens’ use of milk flavorings

Figure 67: Teens’ use of milk flavorings, 2002-06

Teens’ frequency of using milk flavorings

Figure 68: Teens’ milk flavoring usage frequency, 2002-06

Parents’ attitudes and behaviors regarding milk consumption for children

Figure 69: Parents’ attitudes and behaviors regarding milk, April 2007

Figure 70: Parents’ attitudes and behaviors regarding milk, by race/ethnicity, April 2007

The Consumer—Where Milk is Bought

Introduction

Summary

Choice of primary and secondary channels to purchase milk

Figure 71: Where milk is bought, April 2007

Where milk is usually bought

Figure 72: Where milk is usually bought, by age, April 2007

Figure 73: Where milk is usually bought, by household income, April 2007

Figure 74: Where milk is usually bought, by presence of children in the household, April 2007

Where milk is also bought

Figure 75: Where milk is also bought, by presence of children in the household, April 2007

The Consumer—Attitudes, Behaviors and Concerns

Introduction

Summary

Incidence of trying functional and milk-based beverages

Figure 76: Incidence of trying selected functional and milk-based beverages, April 2007

Figure 77: Incidence of trying selected functional and milk-based beverages, by age, April 2007

Figure 78: Incidence of trying selected functional and milk-based beverages, by race/ethnicity, April 2007

Figure 79: Incidence of trying selected functional and milk-based beverages, by presence of children in the household, April 2007

Concerns about growth hormones

Figure 80: Incidence of being concerned about growth hormones, by race/ethnicity, April 2007

Figure 81: Incidence of being concerned about growth hormones, by presence of children, April 2007

Growth hormones and media attention

Figure 82: Growth hormone awareness and reaction, by age, April 2007

Attitudes and behaviors regarding milk

Figure 83: Attitudes and behaviors regarding milk, by age, April 2007

Hormone-free more appealing than organic in terms of price

Most milk drinkers can tell the difference between brands

Longer-lasting product might attract infrequent drinkers

Benefit of soy does not appear to be reaching those most at risk for heart disease

Respondents appear open to cloned product

Milk competing with yogurt drinks among younger respondents

Older respondents less willing to paying more for organic

Younger respondents trying out new formats

Reasons for drinking milk

Figure 84: Reasons for drinking milk, by age, April 2007

Reasons for not drinking milk

Figure 85: Reasons for not drinking milk, by gender, April 2007

Future and Forecast

Future trends

Functional milk positioned to compete with other beverages

Omega-3 fatty acids appearing more often

Organic milk—continued strong demand met by oversupply

Hormone-free non-organic milk promises future growth

Figure 86: Oberweis hormone-free milk, TV ad, 2006

A new product boasts the taste of whole milk with none of the fat

Figure 87: SunMilk, TV ad, 2006

Inflationary pressure on milk prices

Market forecast

Milk market

Figure 88: Forecast of total U.S. retail sales of milk, at current and constant prices, 2006-11

Refrigerated low-fat/non-fat milk

Figure 89: Forecast of U.S. FDM* sales of refrigerated low-fat and non-fat milk, at current and constant prices, 2006-11

Refrigerated whole milk

Figure 90: Forecast of U.S. FDM* sales of refrigerated whole milk, at current and constant prices, 2006-11

Refrigerated flavored milk/eggnog/buttermilk

Figure 91: Forecast of U.S. FDM* sales of refrigerated flavored milk/eggnog/buttermilk, at current and constant prices, 2006-11

Kefir/milk substitutes/soy milk

Figure 92: Forecast of U.S. FDM* sales of kefir/milk substitutes/soy milk, at current and constant prices, 2006-11

Evaporated/condensed milk

Figure 93: Forecast of U.S. FDM* sales of evaporated/condensed milk, at current and constant prices, 2006-11

Milkshakes/non-dairy drinks

Figure 94: Forecast of U.S. FDM* sales of milkshakes/non-dairy drinks, at current and constant prices, 2006-11

Forecast factors

Appendix: Trade Associations

National and international associations

Regional associations

State associations

Abstract

• The reasons for declining per-capita milk consumption and changes in the types of milk consumed
• How the industry has increased sales in under-penetrated channels such as convenience stores and vending, competing with fast-growth beverages such as bottled water and sports and energy drinks
• The reasons for the growing trend towards organic milk, and how important it is likely to become
• Evaluation of new product trends through sales data and product launch tracking by Mintel Global New Products Database
• Extensive brand sales analysis—60% of the market goes to private labels, yet in 2004-06, leading brand names significantly outperformed private-label products
• The effect that has come from promoting milk for its health properties as well as for weight loss
• How this very mature market can grow
• Consumer attitudes and opinions about milk and milk alternatives—what they think about hormones, organic, soymilk, price levels, shelf stable products, and more
• Why people drink milk and whether non-milk drinkers can be converted
• Factors contributing to inflationary pressure on milk prices and how they will influence milk demand in the future

• Whole milk (full-fat milk)
• Non-fat milk (skim) and low-fat milk (2%, 1%, and half-%)
• Flavored milk drinks, including chocolate milk, eggnog, and buttermilk
• Soymilk, kefir, rice milk and other milk substitutes
• Non-dairy beverages, defined as beverages that are considered non-dairy but are made from milk components such as dairy whey

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