UK: Consumers trade down in dairy as costs continue to rise

Published Mar 21, 2023

Tridge summary

62% of consumers are concerned by the rising prices of food (Source: AHDB/Blue Marble Sept 2022) and price has grown in importance when choosing a dairy product, with 57% saying it has recently become more important (Source: AHDB/You Gov Nov 2023). While people are trying to save money, dairy is such a staple product that not many are choosing to reduce their dairy consumption for cost reasons (claimed by only 27% of dairy reducers compared to 54% of meat reducers). Rather they are choosing to save money by buying cheaper versions of the same products.

Original content

Clearly brands may have a tougher time over the next year or two and processors will need to make investment decisions wisely, investing in parts of their portfolio that offer the biggest opportunities for growth or that are strategically important. Conversely, those supplying private label and retailers have a clear opportunity to capitalise on the trend towards trading down in replicating some of the more added value branded products in a more pared-back way. How will this play out by category? Within milk, this dynamic is particularly evident for organic. Overall cow’s milk volumes are declining by -3.1% year on year (Source: Kantar 12 we 25 Dec 22). However, organic cow’s milk volumes have declined by -14.7% in volume terms. Price for both conventional and organic have risen at a similar rate (35% and 32% respectively) but the more premium position of organic makes it less affordable for many consumers. There is a similar pattern for branded milk. Private label milk is ...

Source: Ahdb