YAZOO pioneered the UK flavoured milk sector, being the first brand in the market, over three decades ago.
The brand has met consumer demand for taste, which remains the most important reason for purchasing flavoured milk.
Health is the other great purchase driver and YAZOO has responded by reducing the added sugar in its milk drinks by 20%, and adding a YAZOO KiDS no added sugar, no artificial sweetners into the range in line with government targets.
Dan Chesbrough, Business Unit Controller, Grocery at FrieslandCampina, tells Grocery Trader what trends are driving the market and passes on some merchandising tips for retailers to grow sales of flavoured milk. FrieslandCampina is one of the world’s largest dairy cooperatives, wholly owned by 20,000-member farmers across the Netherlands, Germany, and Belgium. FrieslandCampina has offices in 32 countries and employs over 21,000 people worldwide.
What are the key products in your range that supermarkets should be stocking?
FrieslandCampina has a host of milk drinks available to the grocery channel. We are best known for our YAZOO brand, which includes the new Limited-Edition Jaffalicious Choc-Orange flavour and the innovative YAZOO KiDS range. Dutch premium milk brand, Chocomel is seeing great success and providing strong category growth in the premium flavoured milk segment.
What is the value of the UK flavoured milk market?
The UK flavoured milk market is currently worth over £382million1, and within this, YAZOO is the number one traditional flavoured milk brand2.
What trends are driving the market?
Taste continues to be the number one reason why consumers purchase flavoured milk products3. As the first flavoured milk brand to be sold in the UK, Brits have been loving the taste of our milk for over 30 years, so we know we’re delivering here.
Along with taste, health credentials will always be a key driver for the market. We’re always working to remind shoppers about the goodness of dairy drinks. YAZOO sugar reduction plans are in line with PHE targets to reduce added sugar in milk drinks by 20%. This means our drinks are no longer classified as HFSS and based on last year’s sales of over 37 million litres of YAZOO, we have removed over 400 tonnes of sugar from being consumed4.
Lots of brands now offer low or no sugar product alternatives so it’s important for us to keep driving the message that milk drinks like YAZOO offer many other nutritional benefits that soft drinks currently on the market cannot. YAZOO is free from artificial sweeteners, flavours, or colours, high in protein and is a source of calcium, protein, and Vitamin B2.
Take home has skyrocketed over the past year. Sharing packs currently occupy over 30% of the category5. Over the past six months, sharing packs have continued to gain category share at the expense of single serve packs, experiencing a value sales growth of +5.6%6 vs single serve, which has suffered -8.4% decline7.
This trend is seen most clearly through the grocery channel where sharing packs have grown 12.4% specifically8. As the market leading brand, YAZOO’s performance both reflects and drives this trend – our large packs have grown +16.7%, vs single serve packs, which have dipped slightly by -1.7%9.
Our range versatility is unmatched. We are the only brand in the category to offer both larger multi-serve and multi-pack formats, so our focus has very much been to offer continued value to shoppers through both formats.
What is FrieslandCampina’s market share and how has the company been performing?
FrieslandCampina UK enjoyed a 13.4%10 increase in sales and saw revenues climb £6.2m to £52.3m in 201911. This was off the back of strong growth for the brand and our own label operation.
YAZOO saw sales increase by £6.7m, to £62.8m12 last year as we continued to perform strongly and outgrow the flavoured milk category, while finished goods delivered an excellent volume growth of 7%.
Our online sales have subsequently increased as shoppers are buying more volume online and purchasing more packs. To capitalise on this, we have bolstered our larger pack sizes online. E-commerce sales for our 1L range grew by 334% YOY and YAZOO KiDS multi-packs have grown by 143% YOY13 so these have been incredibly successful for us.
Building our presence on online retailers such as Amazon, where YAZOO 1L is now number one in flavoured milk14 in the UK, has really paid dividends for our brands.
What effect has Covid-19 had on the flavoured milk market?
As a result of the Coronavirus restrictions, the on-the-go category dropped while in-home occasions continued to perform strongly. For us, the impact of Covid-19 has been twofold; on-the-go missions a key occasion for us, has been adversely affected, however there have been big upsides in flavoured milk. With people spending more time at home now than ever before, buyers are looking for brands that deliver as well in home as they do out of home. Household names have an opportunity here to maximise their reputations and see growth.
Our diverse portfolio includes a significant take home offering, which ranges from four packs, six packs to one litre sizes. This has helped power YAZOO’s strong growth and performance. We have seen a 4.3% growth year on year, driven largely by the take home packs15.
Shoppers recognise our packaging, and they know where they can find us in stores. Even with the change of occasions, we are still seeing growth as shoppers are more likely to try new variants and formats from brands they already know, love and ultimately trust.
We predict that take home packs will continue to dominate, and even as restrictions begins to ease, on-the-go occasions will be slow to return as people continue to work from home.
However, beyond this, we expect much of convenience-based consumption will return to normal. The brands of tomorrow are those that can make the most of their breadth of range and innovation across key occasions, both in-home and on-the-go, and providing a solution for every consumption need. Through YAZOO, Barista and Chocomel’s different formats and sizes, FrieslandCampina offers exactly this.
What advice do you have for retailers on merchandising flavoured milk in store?
Include sharing sizes of popular brands and products – 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. We have also seen significant uplift in Rate of Sale as much of the range has moved into the Chiller Fixture across the Grocery channel which allows it to be seen more frequently by consumers.
Position on-the-go formats of drinks front of store and at eye level – hijack purchase occasions by targeting those impulse buyers that are looking for something good, quickly to increase basket spends.
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 have an existing relationship with. They help keep your offering different, and consumers already trust their reputations when they want to try something new.
How do you work with retailers to improve sales?
We’ve worked extremely closely with retailers for over 30 years to establish ourselves as a key player in the milk and soft drinks category.
We are regularly arming retailers with insights to support them with curating and maintaining a successful flavoured milk drink fixture. Building their trust is so important; if we support them with POS and site visits, they’re more likely to stock our products because they know we go that extra mile for them and we’re there to help them drive sales.
This year more than ever it’s important we stay close to suppliers and work collaboratively to grow together.
Do you have any NPD on the horizon?
Committed to innovating flavoured milk, our new Jaffalicious Choc-Orange flavour is the fourth limited edition YAZOO has launched in the last three years. Our previous limited-edition flavours have proved very popular with consumers and retailers. YAZOO’s limited-edition series has previously delivered upwards of £7m incremental sales to the category.
The popularity of chocolate orange as a combination continues to grow, with a 52% increase in UK search demand for the flavour vs. last year16. The new Jaffalicious Choc-Orange edition combines our signature chocolate milk with sharp but sweet citrus tones to entice shoppers into the category by offering a new flavoured milk experience not seen before.
Our NPD plan is as busy as it’s ever been – we will be launching an innovative project later in the summer and have a big news coming in the autumn, so watch this space!
What marketing activity do you have planned for this year?
Our newest Limited-Edition Jaffalicious Choc-Orange flavour launch is being supported by a fully integrated marketing campaign which includes TV On Demand print and digital advertising, social media support, nationwide sampling, and shopper marketing.
Our Merlin Group partnership, offering shoppers the chance to win two-for-one tickets to Thorpe Park and Alton Towers, is back for this year. The promotion is featured on-pack across our core and Limited-Edition range.