Milk - US - June 2007

SUMMARY

Abstract

The overall U.S. milk market exhibited flat growth from 2001 to 2006. Yet, there was excitement, as consumers buoyed the market looking for ready-to-drink, value-added, and healthy beverage options.

This extremely thorough report will help you make informed decisions in tailoring marketing messages to different consumers, launching targeted products, and identifying retail strategies that will help stimulate market growth. Some of the issues discussed in this report include:

• 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

The report examines the following segments:

• 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

Organic milk is also discussed as a part of each segment.

Excluded from this report are creamers, half-&-half, powdered milk, milk for infants, and goats

TABLE OF CONTENTS

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