How much are on the go dairy drinks worth? Is the sector in growth?
Flavoured milks continue to grow in popularity, and while breakfast and on-the-go are the most popular consumption occasions – the number of lunch occasions grew by 23% last year1, driven by ongoing hybrid working patterns.
As a result, take-home sales skyrocketed for YAZOO and our sharing packs have continued to gain category share. Consumers are likely to continue shopping less frequently this year and will stock up on larger formats to ensure they do not run out of their favourite brands and home comforts as quickly.
Overall, the dairy drinks category is in good health, with a value of £288.5m2, with yoghurt drinks, immune-boosting products and RTD coffees all having strong years.
What is driving the growth?
The trend for sharing packs has been most clearly seen in the grocery channel where sharing packs have grown 11.8%3. As the market leading brand, YAZOO’s performance both reflects and drives this trend – our large packs have grown by +76% and single serve packs by 19.6%4.
Out of home has always been the heartland for the YAZOO brand, and all signs point to an ever-improving recovery for this channel as more people are out and about in 2022 – good news for flavoured milks and the entire on the go sector.
We saw huge success last year with our limited edition Jaffalicious Choc Orange YAZOO, it delivered upwards of £1.23m5 incremental sales to the category, so we’ve relaunched another previous best-seller with the return of YAZOO Choc Caramel. We’re into our fifth year of limited-edition flavours – these products can create a sense of exclusivity and contribute to brand longevity in the long run, as shoppers are more likely to try new variants and formats from brands they already know, love and ultimately trust.
Consumers are always interested in new, innovative products, but classic flavours like chocolate, strawberry and banana will always stand the test of time.
The entire dairy drinks category has been supported by the trend for premiumisation in flavoured milks. So, it’s been a big year for our stellar chocolate drink Chocomel, which has been adding new users to the sector, driving growth way above the category average to become the Fastest Growing Premium Milk Drink over £1m6, and is now worth over £6m7. With an additional out of home campaign running in July, we expect to drive further awareness of Chocomel this summer, especially within convenience.
How is YAZOO performing?
YAZOO remains the UK’s number one traditional flavoured milk8, continuing to outgrow the flavoured milk category, even in terms of online sales – which has risen for the brand from 3.4m to 5.2m in the past year. A big part of our success in the past year is that YAZOO has seen a 30% increase in distribution in the past 12 months.
Our YAZOO KiDS product, which has a completely unique no added sugar or artificial sweeteners recipe, is also the fastest growing no added sugar milk drink9 on the market.
We have ambitious plans to grow the online part of the business by over 100% year-on-year in 2022 and there is a big opportunity for dairy drinks within the rapid grocery delivery sector, which we’ve got big plans to continue expanding into.
What is FrieslandCampina doing to become a more sustainable business?
From a health perspective, YAZOO milk drinks are all HFSS-compliant. Based on last year’s sales of over 37 million litres of YAZOO, we’ve removed the equivalent of over 400 tonnes of sugar. That’s the kind of action people expect now.
As a brand, it is important for us to drive the message that milk drinks like YAZOO offer many other nutritional benefits that soft drinks currently on the market cannot, including a source of calcium, protein and Vitamin B2
Insight from our recent FrieslandCampina Ingredients Report shows that 65% of the population10 believes that food and nutrition brands need to do more to protect the planet, a number that is only set to grow in the coming years. Improving the packaging of our products and sustainably sourcing ingredients is a big part of this for us.
We intend to become a more circular company, so ensuring the packaging of our popular on-the-go products YAZOO, Chocomel and Barista is made from reused materials and can be easily recycled is a top priority.
All bottles of YAZOO are now 100% rPET across the core range. This is a significant step towards YAZOO’s goal of making all its packaging recyclable or reusable by 2025. Looking ahead, all on-the-go YAZOO bottles will feature a tethered cap to help reduce littering, and the sleeve removal mechanic will be updated to support ease of recyclability.
Chocomel has recently updated its 1L carton packs to be made from 88% plant-based materials, using FSC-approved cardboard. They are also fully recyclable, including the lid.
Finally, all the cocoa used in YAZOO’s Original Chocolate and Choc Caramel flavours, as well as in Chocomel is now certified by Rainforest Alliance, the world’s largest cocoa certification programme.
Tell us about the YAZOO Merlin partnership – what is the brand offering consumers and what are the mechanics of the promotion?
Our ongoing partnership with Merlin, with its 2-4-1 on-pack promotion for popular theme parks including Alton Towers, has played a role in driving brand success in 2021, and we are delighted to be continuing this successful collaboration in 2022.
Available until the park season ends in November 2022 across our permanent and Limited-Edition Choc Caramel flavours in individual and sharing size formats, the popular pro-motion sits front and centre on-pack to draw attention and standout on shelf.
Each bottle has a unique code that youcan use to redeem 2-4-1 tickets at Alton Towers or Thorpe Park – visit the YAZOO website to redeem, it’s that simple!
How is YAZOO working with the Minions movie?
The success of our YAZOO KiDS product can be partly attributed to the very popular Minions campaign that began last year. The partnership drove purchases and helping the KiDS lines stand out on shelf – there will be further activations around the latest movie launch, Minions: The Rise of Gru in July.
The Minions brand is such a recognisable, energetic and fun entity and it’s the ideal partner for YAZOO KiDS – we expect it to support further growth this year.
What merchandising advice do you have for multiple retailers?
As mentioned, we predict that multipacks will continue to perform well this year so would recommend stocking singles and sharing sizes of key soft drinks brands.
Although YAZOO is an ambient product with a shelf life of up to nine months, we would recommend also stocking the drinks in chiller aisles to maximise those high footfall areas of the store – and we know that consumers like to drink their YAZOO cold. This allows the product to be seen more regularly by consumers and can lead to more frequent upsell opportunities.
Position leading on-the-go formats of drinks, such as YAZOO, front of store and at eye level to make sure you’re on the radar for those looking for a convenient and tasty product to grab on the move.
Dedicate space to both best-selling flavours and new launches from reliable brands – shoppers are likely to try new variants and formats from brands they already know, love and ultimately trust.
How do you work with multiple retailers to grow sales?
We’re in a strong position when it comes to HFSS – all YAZOO milk drinks are HFSS-compliant. As a result, we can continue to invest in the category – with both above the line advertisements and in-store promotions, as well as feature and display. We’ll continue to work with retailers to maximise YAZOO’s presence in store when the legislation lands in the autumn.
Ecommerce has also been important to YAZOO in the past 12 months and we’ll continue to invest in digital marketing to capitalise on the additional opportunities for HFSS-compliant products in the months ahead. The lockdown restrictions prevented us from hitting the road and speaking to retailers about our chilled coffee brand Barista, so we have a big field sales drive across the UK this year to increase awareness and listings. The focus will be on the convenience chan-nel, within which Barista is now a £1.22m brand11, and actually outsells the UKs #1 coffee chains RTD coffee in traditional convenience12.
PMPs still perform really well in the convenience channel. YAZOO’s 1 litre bottles are available as a £1.79 PMP; whilst the core 400ml bottles are in a £1.15 PMP, with an additional flash showing the attractive new 2 for £2 offer. YAZOO is currently worth £74m, and £32m of sales (43%) come through the convenience channel, with PMPs representing 64% of these sales13.