Health and snacks drive dairy growth

An increase in health awareness and the consumer trend towards snacking has driven dairy volume sales to an all time high, claims a recent survey from market analysts Euromonitor International. From 1996-2000 volume sales for yoghurt and chilled desserts grew by 18.4 per cent and 19.1 per cent respectively. The report adds that it is "the usual suspects"​ who are reaping the benefits and profits.

French food group Danone and Swiss group Nestlé are the only companies active in every sector within the western European dairy products market - a reflection of their comprehensive product range in packaged foods overall.

Both companies are strongest in branded snack foods, specifically potted desserts and chilled snacks, as opposed to generic staples like cream and butter and it is the sales of such conveniently packaged, low-fat or otherwise healthy yoghurts and chilled desserts that is driving both company's market shares, the report continues.

Value sales of yoghurt totalled US$10,819.5 million (€11,977.8m) in 2000, commanding 14.8 per cent of the western European dairy market. As the most valuable and mature sector it is prone to competition from the comparatively more novel fromage frais and chilled desserts, yet growth remained dynamic in a number of markets.

New product developments spurred growth accentuating distinctive, value-added health benefits, including more functional products, such as Benecol, a yoghurt extension of the successful cholesterol-reducing margarine, and expansion of the underdeveloped probiotic yoghurt category, with key launches in 2000, such as Müller Vitality.

Chilled desserts, which recorded US$ 3,304.2 in value sales with 4.5 per cent of the western European dairy products market, outperformed both fromage frais and yoghurts in the UK, where growth of 4.9 per cent was underpinned by UK consumers' fondness for leading chocolate confectionery brands. Many of which, such as Nestlé's Aero and Smarties, were extended as potted desserts.

According to the Euromonitor​ report Danone is the clear leader in these key sectors. The Danone brand is the best selling yoghurt and chilled dessert in western Europe and the company also owns the best selling fromage frais product, Jockey, with overall share augmented by many other successful potted desserts. Danone is also the third leading manufacturer of chilled snacks, with the Prince brand.

Nestlé is the second leading manufacturer in yoghurts, chilled desserts and chilled snacks. Nestlé has a wide range of important brands in these sectors, not least La Latière, otherwise know as Milkmaid or La Lechera, the second best selling chilled desserts brand and also a significant name in yoghurt. Nestlé's market presence in yoghurt was also substantially increased by the acquisition of the Mis brand in 2000, the best selling yoghurt in Turkey and third most valuable yoghurt brand in western Europe.

Nestlé's position in yoghurt is also underpinned by LC1, the company's foray into probiotic drinking yoghurt. In chilled snacks, Nestlé is the second leading manufacturer via its Nesquik brand, second only to Ferrero's Kinder range.