Roisin O’Sullivan, Madrid Office, Bord Bia – Irish Food Board
In the past, dairy drinks only came in three varieties: full-fat, semi-skimmed and skimmed. Today, milk represents the second largest segment in value terms of the global dairy market, and in the western world it is premium priced, added-value drinks with built-in health benefits that are driving growth in the liquid dairy category. Consumers still have a real taste for dairy beverages. Tracing the development of retails sales over the past 15 years and forecasting to 2017 – Euromonitor shows a market segment in healthy growth in Europe with the UK, Germany and Spain the biggest single markets.
The low fat trend continues to influence new product development after more than a decade, and according to Market analysts at Mintel; high protein is highlighted as a key growth area. Launches of added fibre dairy drinks are rising with consumers showing continued interest in additional functional health benefits.
According to a recent Canadean report, the Spanish economic crisis continues to undermine commercial beverage consumption, as soaring unemployment and rising VAT continued to weaken consumer purchasing power. However, Canadean research reveals that one category is expected to buck the trend in 2013: dairy drinks. Dairy drinks, while still the smallest component of the Spanish beverage market, have been growing steadily, albeit at a low rate, for the past few years despite the economic situation. Growth has mainly been driven by a shift in consumption from on-premise to off-premises.
Trends within the dairy drinks market were mixed in 2012. Segments carrying premium retail prices, such as cultured dairy drinks and soy milk, suffered a decline as consumers cut back on non-essential purchases. White milk, flavoured milk and evaporated/condensed milk, however, offset the drop in the premium segments thanks to their lower prices. Private Label will be a key force behind retail sales as the low prices and wide range on offer help to attract consumers seeking the best value for money.
The performance of the Spanish beverage market in 2012 will be analysed in further detail in Canadean's Spain Soft Drinks Market Insight report due to be released in June 2013.