Dairy ethical label market can grow by $4.6bn says Euromonitor

By Jim Cornall contact

- Last updated on GMT

According to Euromonitor International, there is huge potential for growth in the dairy ethical labels market.
According to Euromonitor International, there is huge potential for growth in the dairy ethical labels market.

Related tags: Marketing

There is a growing movement towards sustainability, social responsibility and transparency on labels, says global market research company Euromonitor International, as it launches its ethical labels database, Passport: Ethical Labels.

According to the new research, halal and vegan labels are set to grow by a CAGR of more than 5% annually between 2015 and 2020, translating into $13bn and 708m additional sales.

Huge growth potential for dairy

While vegan and halal labels top the list for growth, the dairy industry can also take advantage of ethical labels.

Alan Rownan, ethical labels analyst at Euromonitor International told DairyReporter that, in the dairy category, “Recycling, religious, locally sourced, and clean labels are the main drivers.”

“Looking at the major trends, dairy with clean label claims is set to grow by $4.6bn over the forecast period 2015-2020.

“This is based on the performance of the dairy category coinciding with manufacturers incorporating no artificial/all natural/GMO free/BPA free claims on products.

“Companies such as China Mengniu Dairy, Danone, Whitewave Foods, Lactalis and Chobani are driving value sales of dairy products bearing various clean label claims and easing the concerns of consumers that may be suspicious of artificial ingredients.”

Increased transparency

Rownan said that underlying ethical labelling is the call for increased transparency and accountability from consumers globally.

“It is essential for dairy companies to utilize the limited packaging real estate on products to allay consumer concern through material labels that adequately inform consumers of product characteristics, and this is perhaps best seen through clean label claims.

Quick facts

  • After the US and Japan, China is the third-ranking market for ethical labels
  • The US is the largest Kosher market, 18 times the size of Israel
  • UK emerges as the leader in animal welfare labels with $30.1bn in 2015
  • In Latin America, the Rainforest Alliance label could deliver 143.8% value sales increase by 2020
  • The UK leads global vegetarian/vegan labelled packaged food sales
  • Globally, Nestlé leads in clean label products with an 8% value share, followed by PepsiCo, Coca-Cola and Unilever
  • The global market for ethically labelled packaged foods, soft drinks and hot drinks (excluding private label) accounted for $793.8bn in 2015 and could hit $872.7bn by 2020 

“Overall, the majority of clean label value sales stem from the US, Chinese, German, Italian and UK markets. Reformulating products and packaging in an effort to ease the concerns of consumers is becoming a necessity in some of these markets in order to keep up with competitors, whereas in others, companies can be frontrunners by including clean label claims and influencing the push for transparency,”​ he said.

“Kosher labelled dairy products in the US are showing strong value sales over the forecast period, while China leads halal labelled dairy products globally, highlighting just how specific market preferences are, and how there is no ‘one size fits all’ policy.”

How data is analyzed

Passport: Ethical Labels analyzes a wide range of labels currently on the market, helping companies understand the key drivers of ethical consumerism globally.

Rownan said that, geographically, the system covers 26 key markets, and Euromonitor has tracked ethical labels on approximately 26,000 brands (branded products i.e. excluding private label).

“This system will highlight the impact that various ethical labels can have and generate a meaningful value added proposition to brands.

“Also included in our scope are several emerging markets that have been chosen tactically to highlight the importance of varying ethical labels preferences. For example, what value is derived from halal labelled products in the UAE? How prevalent is kosher labelling in Israel?”

He said the data allows Euromonitor to look at the performance of brands with ethical labels and get intricate breakdowns of where companies need to be to meet demand for certain characteristics.

“Whether it’s the ‘No Artificial Colors’ label in UK confectionery, or ‘Non-GMO’ label in the US, we are able to track the prevalence of labels through value sales, and map these to overall category performance based on our packaged food, soft and hot drinks industry baselines,” ​Rownan said.

Growth for vegan

Ewa Hudson, head of health and wellness at Euromonitor said that vegan product labelling is one of the key categories in the future, as an increasing number of companies are expanding their consumer appeal by staying away from animal ingredients whenever possible.

“The rising demand and trend for vegetarian and vegan proteins indicates where the market is moving right now,”​ Hudson said.

The top three fastest growing vegan markets between 2015 and 2020 are China at 17.2%, UAE at 10.6%, and Australia at 9.6%. 

Top 12 dairy categories:

Data supplied by Euromonitor International

Related topics: Market Trends

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