Flavoured_Milk_Free

UK 

Flavoured 

Milk 

Market 

2017 

& 

Beyond

UK FLAVOURED MILK MARKET 2017 & BEYOND 

FOOD AND DRINK 

UK FLAVOURED MILK 2017 & BEYOND 

COMMERCIAL AND CONSUMER RISKS AND OPPORTUNITIES 

All rights reserved, ©Teepee Ltd, t/a HRA Food & Drink: 2016 

to 2017 

1


Table of Contents 

Foreword 6 

Executive summary 8 

1. THE FLAVOURED MILK MARKET 11 

1.1 The global flavoured milk market 12 

1.2 UK dairy trade: exports and imports 13 

2. NUTRITIONAL BENEFITS OF MILK 15 

2.1 Cow’s milk nutrient content 15 

2.2 Milk treatment and nutrition 17 

2.3 Health benefits of dairy 18 

2.3.1 Dairy and infant nutrition 18 

2.3.2 Milk and health factors 19 

3. EVOLUTION OF THE FLAVOURED MILK 

20 

CATEGORY 

3.1 Key trends in flavoured milk innovation 22 

3.2 White milk market indicators 23 

3.3 Flavoured milk market indicators 23 

3.4 Flavoured milk market segmentation 25 

3.5 Own- brand labels in the flavoured milk market 26 

3.5.1 Limitations to own-brand development 27 

3.5.2 Own-label flavoured milk and sub-categories 27 

3.5.3 The future if own-label flavoured milk 28 

3.6 Summary 28 

4. NEW PRODUCT DEVELOPMENT GUIDANCE 29 

4.1 Occasion and usage 29 

4.2 Consumer segments 31 

4.2.1 Consumer segments: 0-14 years 32 




4.2.5 Consumer segments: 60+ years 38 

5. ADDING VALUE TO FLAVOURED MILK 40 

5.1 Macro food and drink trends 41 

5.1.1 Organic 41 

5.1.2 Minimal processing and transparent labelling 42 

5.1.3 Lactose-free milk 43 

5.1.4 Sugar reduction 44 

5.1.5 Nutritional benefits 45 

5.2 White milk trends 46 

5.2.1 Supporting dairy farmers 46 

5.2.2 Innovative milk sources 47 

5.2.3 White milk NPD 48 

5.3 Flavoured milk trends 49 

5.3.1 Functionality driven NPD 49 


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2


5.3.2 Flavour driven NPD 51 

5.3.3 Formula innovation 53 

5.4 Packaging 54 

5.4.1 Attitudes towards packaging in the UK 54 

5.4.2 Packaging evolution 54 

5.4.3 Sports caps 55 

6. SEGMENTING FLAVOURED MILK: THE POWER 57 

CATEGORIES 

6.1 Traditional flavoured milk 58 

6.1.1 Traditional flavoured milk case study: Frijj 59 

6.1.2 Traditional flavoured milk case study: Yazoo 62 

6.2 Functional and sports nutrition milks 64 

6.2.1 Human protein requirements 65 

6.2.2 Protein over-consumption 65 

6.2.3 Sports nutrition drinks & VAT 67 

6.2.4 Sports nutrition drinks: key facts 68 

6.2.5 Functional milk case study: For Goodness Shakes 71 

6.2.6 Functional milk case study: Dunn’s River Nurishment 73 

6.3 Coffee milk 75 

6.3.1 Coffee flavoured milk case study: Starbucks 76 

6.3.2 Coffee flavoured milk case study: Emmi CAFFE LATTE 79 

6.4 Confectionery and dessert flavoured milk 80 

6.4.1 Confectionery milk case study: Mars 82 

6.4.2 Confectionery milk case study: Gu 84 

6.5 Breakfast ready-to-drink flavoured milk 85 

6.5.1 Breakfast milk case study: Weetabix On-the-go 86 

6.5.2 Breakfast milk case study: Fuel 10k 88 

6.6 Alternative flavoured milk 89 

6.6.1 Comparing dairy alternatives 91 

6.6.2 Alternative flavoured milk case study: Alpro 93 

6.63 Alternative flavoured milk case study: Blue Diamond 96 

6.7 Summary 98 

7 MERCHANDISING AND PRICING 99 

7.1 Tesco 100 

7.1.1 Tesco chilled dairy aisle 100 

7.1.2 Tesco chilled protein aisle 101 

7.1.3 Tesco ambient cereal aisle 102 

7.1.4 Tesco traditional flavoured milk pricing 2016 103 

7.1.5 Tesco coffee and breakfast milk pricing 2016 104 

7.1.6 Tesco functional and protein flavoured milk pricing 2016 105 

7.1.7 Tesco confectionery and alternative flavoured milk 

106 

pricing 2016 

7.2 Sainsbury’s 107 

7.2.1 Sainsbury’s chilled dairy aisle 107 

7.2.2 Sainsbury’s cereal aisle 108 

7.2.3 Sainsbury’s ambient functional food aisle 109 

7.2.4 Sainsbury’s ambient milk aisle 110 

7.2.5 Sainsbury’s traditional flavoured milk pricing 2016 111 

7.2.6 Sainsbury’s coffee and breakfast milk pricing 2016 112 


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7.2.7 Sainsbury’s functional and protein flavoured milk pricing 113 

2016 

7.2.8 Sainsbury’s confectionery and alternative flavoured milk 114 

pricing 2016 

7.3 ASDA 115 

7.3.1 ASDA chilled dairy aisle 115 

7.3.2 ASDA cereal aisle 116 

7.3.3 ASDA ambient dairy and alternative aisle 117 

7.3.4 ASDA traditional flavoured milk pricing 2016 118 

7.3.5 ASDA coffee and breakfast milk pricing 2016 119 

7.3.6 ASDA functional and protein flavoured milk pricing 2016 120 

7.3.7 ASDA confectionery and alternative flavoured milk pricing 121 

2016 

7.4 Morrisons 122 

7.4.1 Morrisons chilled dairy aisle 122 

7.4.2 Morrisons ambient milk aisle 123 

7.4.3 Morrisons traditional flavoured milk pricing 2016 124 

7.4.4 Morrisons coffee and breakfast milk pricing 2016 125 

7.4.5 Morrisons functional and protein flavoured milk pricing 126 

2016 

7.4.6 Morrisons confectionery and alternative flavoured milk 127 

pricing 2016 

7.5 Waitrose 128 

7.5.1 Waitrose chilled dairy aisle 128 

7.5.2 Waitrose cereal aisle 129 

7.5.3 Waitrose ambient milk aisle 130 

7.5.4 Waitrose traditional flavoured milk pricing 2016 131 

7.5.5 Waitrose coffee and breakfast milk pricing 2016 132 

7.5.6 Waitrose functional and protein flavoured milk pricing 

133 

2016 

7.5.7 Waitrose confectionery and alternative flavoured milk 

134 

pricing 2016 

7.6 The Co-operative 135 

7.6.1 Co-op chilled dairy aisle 135 

7.6.2 Co-op chilled on-the-go drinks aisle 136 

8. THE FUTURE OF THE FLAVOURED MILK 

137 

MARKET 

8.1 UK sugar tax 139 

8.2 History of sugar and flavoured milk (1933-2016) 140 

8.3 Sugar debate in the UK 141 

8.4 Current UK sugar consumption 142 

8.4.1 Historic consumption of NMES in the UK 142 

8.4.2 NMES by gender and age group 143 

8.4.3 Sources of NMES by age group 143 

8.5 Comparative sugar content of sweetened drinks 144 

8.5.1 Flavoured milk sugar content 146 

8.6 Public health policies 147 

8.7 Arguments for and against the sugar tax 148 

8.8 Evaluating the sugar tax 149 

8.9 Effect of sugar tax on flavoured milk 150 

8.9.1 Alternative sweeteners 150 


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4


8.9.2 Moves towards reduced-sugar products 151 

8.9.3 Case study: Frijj reduced sugar 152 

8.10 Removal of EU milk quotas 152 

8.11 Abolition of China’s one-child policy 154 

8.12 Environmental concerns and carbon tax 155 

8.13 UK exit from the European Union 156 

8.14 Supporting British farmers 158 

8.15 Ageing population 159 

8.16 Hectic lifestyles 161 

8.17 Adult flavours 162 

8.18 Development of innovative sweeteners 163 

8.19 Lack of UK co-packers 165 

8.20 Future considerations for flavoured milk brands 166 

9 CONCLUSIONS 162 

9.1 SWOT analysis 163 

9.2 Closing remarks 164 


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5


FOREWORD 

The backdrop to the UK flavoured milk market is 

one of relentless change. The removal of the EU 

milk quotas, the transition by emerging economies 

to a Western-style diet, the upcoming introduction 

of the ‘sugar tax’ and the booming sports nutrition 

industry are all aspects of change that create both 

challenges and opportunities for the UK flavoured 

milk market. 

Hamish Renton 

HRA Food and Drink 

HRA Food and Drink has developed this report as a map to guide industry 

stakeholders. Although volume growth in 2014 was slightly lower than in 

previous years, the flavoured milk market still has plenty of room for product 

innovation in the future. 

Overall, we expect the UK flavoured milk market to continue to grow over the 

medium term, but not without improving its nutritional profile. The sugar 

debate reached new heights when, in March 2016, the chancellor George 

Osborne announced a sugar tax on sweetened drinks which will come into 

force in 2018. As a consequence, product reformulation has become a priority 

for all serious players in the market. 

It is also the time when many players are exploring new demographics and 

developing flavoured milk propositions for more mature audiences than the 

category has traditionally served. The UK National Office for Statistics predicts 

the 30-44 years demographic to grow rapidly over the next decade. With 

flavoured milk mostly currently consumed by those under 45 years of age, the 

study of this older segment is fundamental: functional drinks with clear benefit 

differentiation are key. 


to 2017 

6


With age, health rises as a priority for consumers and so does purchasing 

power. Almost one in every five adults in the UK is 65 or over. High-protein 

flavoured milk, often priced at a premium, is set to continue its growth by 

developing propositions for this demographic. 

At HRA Food and Drink, we believe growth needs to be consumer-driven, 

rather than products being pushed by manufacturers and processors. 

Flavoured milk is fundamentally an on-the-go drink; therefore, special attention 

should be paid to consumer lifestyles in order to understand how to integrate 

a different range of milk products into shoppers’ daily routines: 

Point of sale, flavouring, packaging, and nutritional profile are all important 

aspects of the category proposition that can be adapted and improved to fuel 

consumer-driven growth within UK flavoured milk. 

We believe that the flavoured milk market is an area of exciting opportunity 

and innovation, and hope this report illustrates how the industry may move 

forward into the future. 


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7


EXECUTIVE SUMMARY 

The purpose of this report is to deliver up-to-date insights on the UK flavoured 

milk market from a consumer-centric growth perspective. The insights 

generated throughout the report are directed towards existing players, new 

entrants, analysts and investors in the flavoured milk industry. 

This document will serve as a tool for strategic planning to help increase 

market share, or to understand where market share is heading. 

• Chapter 1: Flavoured milk market. 

- Globally, the value of the flavoured milk market grew between 2010- 

15 

- Regions such as South East Asia and Latin America are leading 

demand. 

- Ambient flavoured milk is overtaking chilled in popularity 

- 90% of all the UK’s milk exports are destined for the EU, worth 

£263m in 2014. 

• Chapter 2: Nutritional benefits of milk 

- Consumers are becoming increasingly health conscious 

- Milk is high in protein, calcium, vitamins and minerals. 

- Globally, milk contributes around 14% of dietary protein intake 

- Milk is beneficial for a variety of health factors including bone, 

tooth, cardiovascular and metabolic health 

• Chapter 3: Evolution of the flavoured milk category 

- There are several NPD trends including the rise of functional and 

coffee drinks, a broadening consumer base and targeted 

packaging, 


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8


- The flavoured milk market can be split into 6 categories: traditional, 

functional, coffee, confectionery, breakfast and alternative 

flavoured milks 

- Innovation is starting to be seen in own-label products 

• Chapter 4: NPD Guidance 

- The UK’s population is skewing towards an older demographic 

- Different consumer segments enjoy different flavoured milk 

products 

- NPD should address the needs of different consumer segments 

• Chapter 5: Adding value to flavoured milk 

- There are trends affecting all areas of the flavoured milk industry, 

including macro food and drink, white milk and flavoured milk 

trends. 

- This chapter considers how the industry is responding to these 

trends. 

- Packaging affects consumer reactions to flavoured milk. 

• Chapter 6: Segmenting flavoured milk- the power categories 

- This chapter explores different brands within the traditional, 

functional, coffee, confectionery, breakfast and alternative flavoured 

milks categories. 

- Market behaviour, key figures, packaging evolution and advertising 

history are also considered 

• Chapter 7: Merchandising and pricing 

- This chapter illustrates the positioning of different flavoured milk 

products within main retail outlets. 

- In-depth pricings of different products are also provided 


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9


• Chapter 8: The future of the flavoured milk market 

- There are a range of political, technological, social and 

environmental factors affecting the future of flavoured milk. 

- The sugar tax, set to be implemented in 2018, does not affect 

flavoured milk directly but sends signals to the industry to reduce 

sugar use. 

- It is uncertain how the UK’s exit from the European Union will affect 

the flavoured milk market. 

- An ageing population means the industry should be thinking about 

tapping into new consumer segments. 

• Chapter 9: Conclusions & HRA predictions 

- Flavoured milk should develop products for adults and older 

generations 

- NPD with reduced sugar and health boosting ingredients is key 

- Opportunity for brands to use packaging to target consumer 

segments 

- Own-brand products expected to enter the breakfast milk market. 


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10


1. THE FLAVOURED MILK MARKET 

This chapter provides a global view of the flavoured milk market. Flavoured milk 

can be defined as: 

Products with liquid milk as the main ingredient, which have been processed by 

adding other ingredients such as sugar, colouring and flavours. 

By our definition, flavoured milk excludes dairy products that contain live 

bacterial cultures and yoghurts. Although most flavoured milk products 

included in this report are dairy based, there is a wide range of dairy free milks 

made from plant-based alternatives such as soya, oats and almond milk. 

Flavoured milk is available in two main forms, which influences it’s placement 

within a retail setting: 

Chilled 

Product which is usually fresh 

and is confined to the chiller 

fixture. It is typically placed in 

store above white milk and sold 

as a value added tier. 

Ambient 

Usually ESL or UHT*. Depending 

on category products can be found 

in ambient grocery, cereals or 

lunch deal areas, or even in special 

sports nutrition sections. 

*ESL refers to ‘extended shelf life’ milk products. UHT refers to milk products which have 

been processed through ‘ultra-high temperatures’ 

We have identified six groups of flavoured milk, which we have named the 

‘Power Categories’: traditional, functional, coffee, confectionery, breakfast 

and alternative. Chapter 6 provides a complete description of each Power 

Category, in addition to reporting on leading brands in the flavoured milk 

market, product innovations and new flavours available. 


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11


1.1 The global flavoured milk market 

Globally, between 2010 and 2015, the value of flavoured milk grew every year. 

Flavoured milk is now consumed in every continent of the world, and is the most 

consumed liquid dairy product after white milk. 


milk is least 

favoured in 

Eastern Europe 

Asia consumes 

more than half of 

the worlds’ 

flavoured 

milk 

To view please 

purchase full report 

Regions 

such as South 

America and South 

East Asia are driving 

demand 

Mature markets 

in N. America and 

Europe consume a 

fifth of global 

flavoured milk 

supply 

Source: Tetrapak.com 

Asian markets are core consumers and their preferred product format is ambient 

products. Ambient/UHT flavoured milk has become more popular than chilled. 

In 2015, this category grew to occupy half of flavoured milk consumption 

globally. 


to 2017 

12


The preference for ambient flavoured milk is most dominant in China where 

flavoured milk is offered in on-the-go formats. There are various reasons for 

this but ambient products suit a longer supply chain and offer longer shelf life. 

This reflects the general white milk trend, where ambient is more popular than 

fresh in China. 

1.2 UK dairy trade: exports & imports 

The majority of UK dairy exports comprise of milk and cream (see fig 1.2 & 1.3). 

This is in part due to liquid milk and cream from Northern Ireland going to the 

Republic of Ireland for processing and re-export. Exports of milk and cream are 

particularly high within the EU. Of total UK milk and cream exports, over 90% is 

destined for within the EU. 

The UK imports negligible volumes of dairy products from outside of the EU. 

Non-EU imports only account for around 0.7% of total UK dairy imports, as 

shipping costs make this an expensive option. Milk and cream imports from 

within the EU are considerably higher, making up 76% of total dairy imported. 

In real terms, the value of UK 

UK milk and cream imports and exports 

milk and cream imports has 350 

increased significantly, 

increasing from £45m in 2005 to 

£135m in 2014. The value of UK 

milk and cream exports are 

much higher than that of 

imports, but have only 

experienced £50m growth since 

2005, to £263m in 2014. 

Real value (£ million) 

300 

250 

200 


150 


100 

50 

0 

2014 

2013 

2012 

2011 

2010 

2009 

2008 

2007 

2006 

2005 

Imports Exports 

Figure 1.1: UK milk and cream imports and exports 

over time (Defra 2016) 


to 2017 

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Composition of exports outside EU 

Cheese & curd 

23% 

Butter 

5% 

Whey 

6% 

Yoghurt 

1% 



Milk & Cream 

64% 

Buttermilk, 

curdled milk & 

cream 

1% 

Figure 1.2: Composition of UK dairy exports to countries outside of EU, 2016 

(UK Trade Info) 

Composition of exports within EU 

Cheese & curd 

12% 

Yoghurt 

2% 

Buttermilk, 

curdled milk & 

cream 

1% 

Butter 

4% 

Whey 

5% 



Milk & Cream 

76% 

Figure 1.3: Composition of UK dairy exports to countries inside of EU, 2016 

(UK Trade Info) 


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2. NUTRITIONAL BENEFITS OF MILK 

Consumers are becoming increasingly health concious, and this is translating 

into eating habit and purchase choices. It is becoming increasingly important 

for manufacturers and retailers to understand the nutrient content and health 

benefits of their products in order to accuratly communicate these to 

consumers. 

2.1 Cows’ milk nutrient content 

Cows’ milk is high in 

protein, calcium & 

phosphorus. This protein 

contains many beneficial 

amino acids. 

Milks’ main carbohydrate is 

lactose, which helps 

assimilation of calcium, 

magnesium, phosphorus 

and vitamin A. 



Cows’ milk contains more 

saturated fat than human 

milk, with a high proportion 

of omega-9 fatty acids. 

Milk is a good source of 

calcium, zinc, copper, 

vitamin A & D, niacin and 

folate. 

Source: UN Food and Agriculture Association (2013) 

Dairy has long been thought to be a vital part of human nutrition, which is a 

view held and communicated by organisations such as the Agricultural 

Horticulture and Dairy Board (AHDB) and the National Farmers Union (NFU). 

The following tables shows how milk contributes to the recommended daily 

allowance (RDA) of different vitamins and minerals in adults. 


to 2017 

15


Mineral (mg) Amount Daily requirement RDA* 

Calcium 120 2500 5% 

Iron 0.2 45 0% 

Magnesium 11 350 3% 

Phosphorus 95 4000 2% 

Sodium 45 2300 2% 

Zinc 0.4 40 1% 

Copper 0 10000 0% 

Selenium (µg) 3.7 400 1% 

Manganese (µg) 10 2300 0% 

Vitamins 

Vitamin A (µg) 46 3000 2% 

Niacin (mg) 0.2 35 1% 

Vitamin B6 (mg) 0.06 100 0% 

Folate (µg) 8 1000 1% 

Vitamin C (mg) 2 2000 0% 

Vitamin D (µg) 0.3 50 1% 

Figure 2.1: Vitamin and mineral content of cows’ milk per 100ml, in relation to the 

recommended daily allowance for adult ages 13-70. * RDA- Recommended Daily 

Allowance (FAO 2013) 

From figure 2.1 it is evident that milk is a source of a wide variety of vital 

vitamins and minerals. A standard glass of milk is around 250ml, meaning a 

single serving can give over 12% of the RDA of calcium, 6% of magnesium 

and 6% of vitamin A. 



Semi 

skimmed 

milk 



Thick 

milkshake 

Tropicana 

orange 

juice 

Cocacola 

Substance 

(mg) 

Energy (kcal) 47 66 88 48 43 

Protein 3.6 3.7 3.7 0.8 0.8 

Carbohydrate 4.8 9.9 15.3 10 10.6 


of which 

4.8 9.2 11.1 10 10.6 

sugars 


Fat 1.8 1.5 1.8 0 0 

Fibre 0 0 Trace 0.7 0 

Vitamin C 2 Trace 1 59 0 

Folate (µg) 9 2 4 36 0 

Figure 2.2: Nutritional composition of different liquids per 100ml (Dairy Council 

2002) 

While flavoured milk may be a high calorie option compared to some 

alternative soft drinks, in comparison to sugary carbonated drinks and orange 


to 2017 

16


juice, it is often the lower sugar option. It is also the option containing the 

highest level of protein and fat, meaning it is also the most satiating option. 

2.2 Milk treatment and nutrition 

Cows’ milk frequently undergoes three kinds of heat treatment to extend it’s 

shelf life: 

Sterilisation 

Milk heated at temperatures above 100ºC to 

eliminate micro-organisms. 

Ultra High 

Temperature (UHT) 



Milk heated to 138ºC for 2-3 second in a closed 

system. 

Pasteurisation 

Milk heated to 74ºC for 15-20 minutes before 

cooling and packing. 

Figure 2.3: Different heat treatments in cows’ milk processing (FAO 2013) 

Heat treatments are used to eliminate micro-organisms from liquid milk, 

meaning it has a longer shelf life. However, heat treatments have a negative 

effect on nutrients (see figure 2.4): 



Figure 2.4: Different heat treatments and associated vitamin loss in cows’ milk (FAO 

2013 pp. 72) 


to 2017 

17


• Sterilisation causes the biggest nutrient loss, eliminating most vitamins, in 

particular vitamin B12. 

• UHT produces the biggest loss of vitamin C 

• Pasteurisation retains the most vitamins, losing only up to 20% of vitamins. 

There has been growing interest in intermediate temperature regimes which 

offer more shelf life than fresh milk, but less vitamin loss than heat treatments. 

This technology is called Extended Shelf Life (ESL) and can deliver shelf life 

of typically between 21 and 56 days from the date of production. 

2.3 Health benefits of dairy 

As a global average, milk contributed 35g of carbohydrates (14% RDA) 6g 

protein (10% RDA) and 7.3% fat (15% RDA) to a person’s daily diet (FAO 

2013) 

• Milk contributes 8-10% of protein in Europe, Oceania and the 

America’s 

• Dairy contributes 8-15% of fat in Europe, Oceania, the Americas and 

Africa (FAO 2013) 

2.3.1 Dairy and infant development 

• Nutrition in the first years of life is fundamental to later health, with 

malnutrition linked to impaired cognitive development. 

• Evidence suggests that a diet containing at least one glass of milk (250ml) 

can provide 25-33% of protein requirements in children from 1 to 5 years 

of age and have a positive impact on weight gain and growth. 

• In developed countries, milk is used in programs intended to address 

malnutrition. 


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18


2.3.2 Milk and health factors 

Bone Health 

Oral health 

The IGF-1 protein in milk 

aids assimilation of amino 

acids into the body, 

contributing to bone 

formation. Diets low in dairy 

are linked to increased risk 

of osteoporosis, and bone 

fractures in children. 



Evidence suggests that milk 

consumption may prevent 

tooth cavities. High levels of 

calcium and phosphate in 

milk contribute to stronger 

enamel, offering more 

protection against tooth 

damage. 

Weight control 

Metabolic Syndrome 

There is evidence that high 

protein diets could 

contribute towards weight 

loss and decreased body 

fat. This could be due to a 

possible increase in body 

temperature, and an 

increased feeling of satiety. 



Metabolic syndrome refers 

to metabolic irregularities 

including obesity, 

hypertension and high 

triglycerides (HDL). High 

dairy diets have been 

associated with lower levels 

of some elements of 

metabolic syndrome. 

Cardiovascular disease 

Although there is no clear 

scientific consensus, there 

are certain studies that 

point to a relationship 

between fermented milk 

and decreased risk of 

cardiovascular disease. 



Cancer prevention 

Calcium, provided by milk, 

is thought to reduce the risk 

of colorectal cancer. In 

addition, milk and dairy 

consumption has been 

linked to a reduction of risk 

of bladder cancer. 

Source: FAO 2013 


to 2017 

19


3. EVOLUTION OF THE FLAVOURED MILK 

CATEGORY 

It is important to understand the historic behaviour of the UK flavoured milk 

market in order to put the current situation into context. Flavoured milk sales 

have shown an overall positive compound annual growth rate since 2009, 

one of relatively few categories in the grocery industry to exhibit sustained 

value growth. This growth has come at a price, with a pattern of heavilydiscounted 

promotions weakening brand loyalty. The high growth has also 

attracted a variety of new entrants into the category, which has in turn, driven 

innovation and widened consumer choice. 

In contrast, the market value of white milk has declined. This is due to a variety 

of factors, including a Russian import ban on EU dairy products and the 

abolition of EU milk quotas. Both have served to increase supply higher than 

demand, leading to a depression of milk prices. Another significant factor is 

price competition between supermarkets and large milk-buying cooperatives. 

This chapter summarises recent flavoured milk product launches. In the past 

five years, every year has seen an increase in the variety of flavoured milk 

products launched into the market. This growth in ‘new product development’ 

(NPD) reflects increased consumer demand but also represents movements 

within the dairy industry, including: 

• the need for dairies to develop value-added milk products to make use 

of increased white milk production; 

• an increase in brands needing to differentiate themselves from 

competitor products; 

• technological advances. 


to 2017 

20




Figure 3.1: NPD in the flavoured milk sector, 2010-2016 


to 2017 

21


3.1 Key trends in flavoured milk innovation 

Coffee 

flavours 

Broader 

consumer 

Broader 

consumer 

base 

base 

To view 

NPD 

please 

purchase Trends full report 

Functional 

drinks 

Targeted 

packaging 

Rapid 

growth 

Limited 

own label 

innovation 

Figure 3.2: NPD trends in the flavoured milk market 

• Brands broadening their target consumer base: Figure 3.1 illustrates the 

increasing number of flavoured milk brands, suggesting many companies 

are trying to deliver products to multiple customer segments. For example, 

Arla has a product in almost every sub-category of flavoured milk, 

including: traditional and functional flavoured milks, coffee, lactose-free 

and sugar-reduced variants. 

• Coffee flavours are on the rise: Coffee is an increasingly popular flavour. 

Starbucks by Arla, Caffé Latte by Emmi and even dairy-alternative milk 

producers like Blue Diamond, Alpro and VitaCoco, have developed coffee 

flavoured propositions. 


to 2017 

22


• Functional drinks are becoming mainstream: Another notable trend is 

functional drinks - a category that once belonged to a relatively niche group 

of consumers made up primarily of athletes and weight lifters, is now 

becoming increasingly mainstream. Flavoured milk products high in protein 

are becoming increasingly merchandised alongside traditional flavoured 

milks. 

• Targeted packaging: Figure 3.1 demonstrates that the development of 

flavoured milk products is not only about producing new recipes, but is 

also about creating attractive and convenient packaging that adapts to the 

consumer's needs and appeals to their aspirations. 

• Rapid growth: As flavoured milk is a fast growing sector, brands are able 

to launch into several distribution channels at once, thus bringing scale to 

what is initially a niche proposition. This dynamic explains how quickly 

propositions like coconut and protein milk have grown so rapidly. 

3.2 White milk market indicators 

• Since 2009, historic value sales of white milk have been showing an 

overall negative compound annual growth rate (CAGR), meaning that 

white milk value sales are trending downwards. 

• In terms of volume sales, white milk has presented almost no CAGR, with 

sales remaining almost constant. 

• In contrast, over the past five years, flavoured milk has shown a positive 

value and volume CAGR. 

3.3 Flavoured milk market indicators 

As previously mentioned, flavoured milk has shown a positive value and 

volume CAGR. 


to 2017 

23


Volume sales have been strong in the UK, having grown by around a quarter 

over the last five years. Over the past five years, flavoured milk value sales 

have been growing at a faster rate than volume sales, implying growth in added 

value products. 

Despite growth in volume sales, consumers are seeming to opt for lower 

quantities of products priced at a premium. UK consumers seem to prefer a 

single serve product that is tailored to their needs instead of several units or a 

larger volume of a less-specific or lower-quality product. 

Not all products in the flavoured milk category should be considered the same 

way. In the standard flavoured milk segment for example, discounting has 

typically been more intensive than in other areas such as protein drinks. 

• Value sales on the rise 


milk market 

White 

milk 

market 

• Volume sales rising 

• Opportunity for market growth 

• Regular promotional discounts 



• Value sales trending downwards 

• Volume sales seeing slight rise 

• Difficult to increase sales due to high 

market penetration 

• Heavy long-term discounting 

Figure 3.3: Comparing indicators in the flavoured milk and white milk markets 


to 2017 

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3.4 Flavoured milk market segmentation 

The flavoured milk sector can be split into six different sub-categories, 

depending on their composition and intending use: 

Traditional 

Occupies almost half of the entire flavoured milk 

offering, and centres around traditional flavours such 

as vanilla, chocolate and strawberry. 

Functional 

Occupies an estimated quarter of the market. 

These target the health conscious consumer with 

specific claims around nutrition and wellbeing. 

Coffee 



Third most popular category. Almost all other 

categories are including coffee in their range 

since the segment is seeing strong performance. 

Confectionery 

Often offered as an indulgent treat due to the 

sweet and rich flavours. These products make. 

up an estimated tenth of the sector. 

Breakfast 

Breakfast and dairy-alternative flavoured milks only 

occupy a small sector of the market, but both are a 

fast growth area. 

Figure 3.4: Flavoured milk sub-categories 

Although the sub-categories are presented in figure 3.4 as mutually exclusive, 

they are not necessarily so. Increasingly, more products are converging and 

breaking out of their sub-category and more boundaries are blurring. 

We estimated the proportion that each of the six different flavoured milk 

categories represent of the entire flavoured milk market. The percentages next 

to each category show our model of how much each sub-segment accounts 

for of the whole flavoured milk category 


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25


Confectionery To view please 


Figure 3.5: Schematics diagram of commonly known brands as a visual guide within 

each category 

3.5 Own-brand labels in the flavoured milk market 

The UK's main retailers (Tesco, Sainsbury's, ASDA, Morrisons & Co-op) all 

offer their own flavoured milks at a more competitive price than branded 

offerings. 

Own-label flavoured milk shares broadly track the share that retailers have in 

the total grocery sector. For example, Tesco’s own-brand flavoured milk 

offering is worth more than that of other retailers. As the category matures, 

there is a tendency for this effect to become more pronounced. 

Sainsbury's flavoured milk offering has remained constant in the past three 

years and the same can be said for ASDA and Morrisons. 




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3.5.1 Limitations to own-brand development 

Whilst retailers have well-developed liquid milk supplies for flavoured milk 

production, a lack of bottling facilities has acted to restrain own-label growth. 

This is a particular constraint on the ability to develop UHT products, which 

are usually manufactured on the continent due to the lack of capability on the 

UK mainland. 

As parts of the sub category mature the development of own-brand flavoured 

milk is more likely. At the present evolution in the market, brands have a clear 

‘breathing space’ before significant amounts of own-label propositions 

emerge. Image and appeal is important to consumers in the category and 

brands appeal to this aesthetic more. Some sub-categories, such as 

specialised functional milks, seem more suited to brands. However, categories 

such as traditional flavoured milk are more open to own-label propositions. 

3.5.2. Own-label flavoured milk and sub-categories 

Traditional 

Most own-label flavoured milk is focuses on 

traditional flavours. 

Functional 

Absence of own-label products within this 

category, where branding is seen as important. 

Coffee 



All main retailers have developed their own 

coffee drink products. 

Confectionery 

Growing own-label presence in this category 

with luxury flavours entering the market. 

Breakfast 

Fairly new category, supermarkets have yet to 

enter with their own products. 

Figure 3.6: Own-label presence in flavoured milk sub-categories 


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27


3.5.3 The future of own label flavoured milk 

Once sub categories have matured, own label is more likely. For now, in 

categories such as breakfast drinks and sports nutrition, brands have a clear 

‘breathing space’ before the own label volumes grow. 

Own-label is currently best suited at targeting a broad consumer base, such 

as traditional flavoured milk consumers. Brands who have the capacity to 

innovate for a specialist audience are able to develop value added categories, 

although this is likely to change as the flavoured milk sector evolves. 

3.6 Summary 

Flavoured milk continues to grow in value and volume 

• Flavoured milk growth surpassed white milk growth in value and volume. 

• The sectors value growth is stronger than volume growth. 

• Discounting by brands is reducing loyalty and value in the category. 

Product launches have been on the rise for the past 5 years 

• Low-sugar is important to watch (i.e. Emmi, Frijj and Arla). 



• Most core categories are developing high-protein variants (i.e. Mars, 

Weetabix, Dunn’s River Nurishment, Arla). 

• Coffee is an obvious area of focus. 

Traditional flavoured milk continues to dominate 

• Own-label compete with brands primarily in traditional flavoured milk. 

• Brands have room to innovate in the other categories: confectionery, 

coffee, breakfast and functional drinks. 


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4. NEW PRODUCT DEVELOPMENT GUIDANCE 

This chapter will look at the major global and local events that have an impact 

on UK dairy production and the flavoured milk market. 

We will consider factors such as occasion and usage, core consumer 

segments, UK consumer perception, product innovation, packaging and the 

other important factors that influence and frame new product development 

(NPD) strategy and eventual product launches. 

4.1 Occasion and usage 



Figure 4.1: Position of chilled flavoured milk in Tesco 

Looking at how retailers position the 

various brands in the category, we have 

developed a model which allows us to 

isolate the primary positioning element of 

the various brands. See figure 4.2 for 

more details. 

Figure 4.1 illustrates one 

take on how retailers 

position the different 

flavoured milk products - 

occasion usage and 

nutritional value being the 

dominant thinking of this 

very clear merchandising 

approach. 


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29




Figure 4.2: Flavoured milk matrix by occasion and usage. 

Everyday Healthy: In the upper left quadrant of Figure 4.2 are affordable 

flavoured milks positioning themselves as ‘healthy’ and intended for regular 

consumption. These include some breakfast drinks, meal replacement 

shakes, drinks aimed at children and 1l plant-based dairy alternatives. 

Premium Healthy: In the upper right quadrant are flavoured milk products 

which are positioned as healthy but with some added benefit which makes 

them more of a premium product. These include branded protein drinks and 

premium traditional flavoured milk with added benefits such as organic milk. 

Affordable Treat: In the bottom left section, we show drinks intended for 

regular use, which have an indulgent aspect. This category mainly consists of 

traditional flavoured milks with relatively high levels of sugar. 

Premium Indulgence: In the bottom right corner, we highlight indulgent drinks 

that are positioned as premium products. This mainly consists of coffee drinks, 

confectionery flavours such as those produced by Mars and indulgence 

products from Frijj and Gü. 


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4.2 Consumer segments 

One of the best ways of understanding the future growth of the market is 

through awareness of the growth of the various demographic segments. 

Understanding this enables flavoured milk brands to gauge the size of sales to 

particular consumer segments over time. This should drive strategic thinking in 

targeting specific population groups by understanding and addressing their 

unique needs. 

Population (millions) 

64.6 

66.9 

72.7 

71 

To 69view please 


74.3 

2014 2019 2024 2029 2034 2039 

Figure 4.3: Projected population of the UK by 2039 (Office for National Statistics 2015) 

In June 2014, the UK population was estimated at 64,596,800. Based on the National 

Population Projections by 2039 a number of predictions have been made: 

• The number of people over 80 is expected to more than double. 

• The number of people over 90 is projected to more than triple. 

• The number of people reaching the age of 100 or more is expected 

to increase more than eightfold. 

We’ll graphically analyse population data, and identify core consumer group for 

each demographic segment, which are then matched with the six subcategories 

of flavoured milks. 


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The core consumer segments have been identified as: 

• School children – primary/secondary 

• Active children – participating in clubs/sports 

• Endurance and strength athletes – gym goers and solo trainers 

• Weight conscious consumers 

• On-the-go professionals 

• Vegans 

• Casual Gym Goers 



Each consumer segment is matched against the six sub-categories of 

flavoured milk. We show which category appeals to which demographic 

segment, which can be used to directly inform NPD strategy. 

The combinations with the darkest shades on the following charts indicate 

the highest consumer interest. 

Of course, the relative growth specific consumer segments also need to be 

considered. For instance, if a high growth consumer segment has a high 

interest in functional milk, then this is a significant piece of information to drive 

brands medium term NPD plans and strategy. 

4.2.1 Consumer segment: 0-14 years 



Figure 4.4: Projected UK population of 0-14 year olds, thousands (ONS 2013) 


to 2017 

32

The population of those between ages 0 and 14 is expected to rise by 8% 

between 2014-2023 in the UK. 

Traditional 

Functional 

Coffee 

Confectionery 

Breakfast 

Alternative 

School 

children 



Active 

children 

Low 

interest 

Moderate 

interest 

High 

interest 

Figure 4.5: Core consumer categories for the 0-14 years demographic 

This expected growth has implications for flavoured milk since there are two 

main core consumer categories that stem from this demographic 

. 

• School children (aged 4-14) who may consume flavoured milk in their 

lunchbox at school or at home as a treat. 

• Active children (aged 4 – 14) with high energy requirements through 

regular sport of exercise/clubs. 

. 

Traditional and confectionery flavoured milks are most relevant to this 

consumer segment. However, with parental concerns over high-sugar 

content it will be crucial for brands to alter their formulations to best appeal 

to these consumers. 

• Active children are likely to have requirements 

for on-the-go drinks which are filling and 

nutritious. These children are typically 



involved in extracurricular activities and may 

have higher nutritional requirements than the 

average child, meaning they might benefit 

from functional and breakfast drinks


4.2.2 Consumer segments: 15 – 29 years 




The 15-29 years segment in the UK is projected to decrease by 2% between 

2016 and 2023. 

Traditional 

Functional 

Coffee 

Confectionery 

Breakfast 

Alternative 

Endurance 

Athletes 

Weight 

conscious 

consumers 

On-the-go 

professional 



Strength 

Athletes 

Vegans 

Casual 

Gym 

Goers 


Low 

interest 

Moderate 

interest 

High 

interest 

Within this group, we have identified several 

core consumer groups for all the flavoured milk 

categories. These groups are not mutually 

exclusive but we regard them as separate 

groups: 

§ Endurance athletes with a need for functional drinks, primarily as fuel for 

sport and recovery. In 2010 the Department for Culture, Media and Sport 


to 2017 

34


reported that endurance activities such as running, swimming and cycling 

make up 34% of sports undertaken by adults. 

• High-sugar content may not be a significant deterrent for these consumers 

so traditional and confectionery milks could be of appeal. 

• Weight conscious consumers with a desire for high-protein drinks which 

keep them satiated to help them avoid snacking. These consumers 

typically look to their diet to manage their weight rather than relying solely 

on exercise. These consumers are also interested in dairy alternatives 

which are often perceived as healthier than cow’s milk. 

. 

• On-the-go professionals with little time for exercise but who are 

conscious about what they eat. These consumers often look for high 

energy products and are clear targets for coffee and breakfast drinks. They 

are willing to treat themselves after work and are also open to on-the-go 

breakfast propositions. These consumers often have high disposable 

incomes and frequently reside in cosmopolitan areas. 

. 

• Strength athletes who demand high-quality protein sources as an 

alternative to powdered protein. Whilst this group makes up a relatively 

small proportion of this demographic, they account for a large proportion 

of protein drink sales. These consumers have high awareness of their diets 

and will avoid products they perceive as unhealthy. 

• Vegans who demand good tasting plant-based alternatives to dairy 

products which can provide them with vital nutrients. According to the 

Vegan Society there are over 500,000 vegans in the UK. This has increased 

from 150,000 in 2006, representing significant growth. 

- 

• Casual gym goers who enjoy some form of regular exercise. According to 

Sport England in 2015, 36% of UK consumers play sport for at least 30 

minutes a week. This rises to 55% for those aged 16-25. These consumers 

may use intermediate or high-protein versions of flavoured milk as recovery 

after exercise sessions. 


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4.2.3 Consumer segments: 30-44 years 




This consumer segment is fast expanding, with particularly significant growth 

from 2018. The number of people within this demographic segment are 

projected to increase to 34% by 2023. 

Traditional 

Functional 

Coffee 

Confectionery 

Breakfast 

Alternative 

Endurance 

Athletes 

Weight 

conscious 

consumers 

On-the-go 

professional 



Strength 

Athletes 

Vegans 

Casual 

Gym 

Goers 


Low 

interest 

Moderate 

interest 

High 

interest 

• Population growth within this segment means there are potential 

opportunities to target this adult consumer group. 

• Consumers in this segment are likely to be busy, will often have families and 

higher purchasing power. 

• This category is also known for being the upper age limit at which flavoured 

milk consumption currently occurs in a significant way. 


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• In this group demand for traditional and confectionery flavoured milk 

decreases, as tastes become more sophisticated. Consumers with young 

families may be more price conscious, decreasing spending on on-the-go 

treats. 

• This consumer group will contain a high proportion of ‘gatekeepers’ and 

so will be an important target for flavoured milk brands aimed at children. 

4.2.4 Consumer segments: 45-59 years 


This segment is expected to grow in the short-term, peaking around 2018 and 

then declining in the subsequent years. 

Traditional 

Functional 

Coffee 

Confectionery 

Breakfast 

Alternative 

Endurance 

Athletes 

Weight 

conscious 

consumers 

On-the-go 

professionals 



Vegans 

Casual 

Gym 

Goers 


Low 

interest 

Moderate 

interest 

High 

interest 


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37


• For this age-group we have used the same adult consumer segments, but 

have removed strength athletes as these consumers are not strongly 

represented within this group. 

• The interest level of 45-59 year olds in flavoured milk is broadly limited. 

None of the consumer segments are likely to have a high level of interest in 

any of the product categories. 

• Traditional and confectionery drinks are unlikely to appeal to this age group 

as consumers in this segment may associate such drinks with younger 

consumers. 

• Coffee drinks, functional drinks and alternative milks are likely to be the 

most appealing products to the majority of these consumers, though 

interest is likely to be lower than to younger consumer groups. 

• As a segment it is significant in its size and purchasing power. Despite this 

there is a distinct lack of products targeting this consumer group at 

present. There is clearly a significant opportunity here for brands able to 

target this consumer segment successfully. 

4.2.5 Consumer segments: 60+ years 

(a) 

(b) 



Figure 4.12: Projected UK population of 60+ years, thousands. (a) data for 60-74 

years; (b) data for 75+ years (ONS 2013) 

We have aggregated core consumers in this demographic segment as both 

segments (60-74 years and 75 years & over) share sufficient characteristics to 

be considered similarly. 


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• People in this demographic are not typical flavoured milk consumers. 

However, their purchasing power is typically high, making them a group of 

interest for premium priced high-protein and functional flavoured milk 

brands. 

• Health becomes a priority for people within these population segments. 

Bone density, sarcopenia and malabsorption of macronutrients are 

particular health concerns for this group. Specific nutritional needs of 

consumers in this segment could be met through the development of 

specific flavoured milk products. 

• This consumer segment is not currently effectively targeted by flavoured 

milk brands. Although protein is clearly important to these consumers, 

brands should recognise they need to target this group in a different way. 

• Some older consumers, especially those with mobility issues, want 

convenience, which is a potential issue for flavoured milk brands. Buying 

heavy flavoured milk packs or frequently buying smaller ready-to-drink 

packs could be a barrier to consumers with less mobility. Powders are 

therefore a way of targeting these particular consumers, or providing longer 

life propositions in smaller bottles or cartons. 

• Consumers in this segment can be reluctant to change their dietary habits. 

Therefore, any products aiming to target this segment will need to easily fit 

into their current routines and food choices. This is a significant challenge, 

and is one of the reasons for the lack of brands currently targeting this 

segment. 

• When current flavoured milk consumers begin to grow into this life stage, 

it is likely that this segment will become more adventurous in its tastes 

and become a more attractive and larger market. 


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5. ADDING VALUE TO FLAVOURED MILK 

Understanding the perception of consumers towards flavoured milk is 

essential, and should shape product packaging, material sourcing, branding 

and merchandising. 

Through awareness of consumers, it is possible to determine what shoppers 

will pay more for. There are a number of areas where customers’ needs are 

not fully being addressed and understanding these can help chart the direction 

for flavoured milk NPD. 

In part, these stem from three meta-trends that sit across the entire category 

– health, premium and convenience - see figure 5.1. However, there are also 

category specific drivers for flavoured milk. 



Figure 5.1: Macro and micro-trends in food & drink, white milk & flavoured milk 

industries 


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5.1 Macro foods and drink trends 

The macro trends described in figure 5.1 are relevant across the whole food 

and drinks industry. We will go in to look at these trends in more detail, their 

implications on the flavoured milk industry and how brands have responded 

to these developments. 

5.1.1 Organic 

• Organic milk currently accounts for around 5% of milk sales. Although 

this seems a relatively small proportion, dairy makes up 26% of total organic 

sales within the UK. 

• With total organic food and drink sales increasing 4.9% in 2015, 

consumers’ perception of organic as a proposition and their willingness to pay 

more for it, is improving. (Soil Association 2016). 

• The beneficial effects of organic dairy are ever emerging. A 2016 report 

by Newcastle University found that organic milk contains around 50% more 

omega-3 fatty acids and 40% more conjugated linoleic acid (CLA) than 

conventional dairy products. This has been linked to a reduced risk of 

cardiovascular disease, cancers and obesity. In addition, it found organic dairy 

to contain higher concentrations of iron, vitamin E and carotenoids. 

• Other factors such as concerns over pesticides, the environment and 

animal welfare are also increasing the appeal of organic. The rise in disposable 

income is also contributing to the rise in popularity of organic as consumers 

become more willing to pay for quality products. 

• Despite the rise in popularity of organic, only a select few brands, such 

as Daioni, use organic ingredients in flavoured milk. 


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Implications: Organic dairy is a growth category though currently there is 

a real absence of organic flavoured milk products. This represents a niche 

opportunity for organic flavoured milk products in the UK. 



Country: Wales 

Brand: Daioni 

Flavours: Banana, Strawberry and 

Chocolate 

Launch date: 2015 

What’s special?: It is made using 

organic milk with a clear provenance 

positioning 

5.1.2 Minimal processing and transparent labelling 

• Consumer desire for minimally processed products reflects the wider trend 

for organic food and drink, which is partly driven by concerns over 

chemicals and their effects on health and the environment. 

• Many consumers judge the healthiness of a product by the ingredients it 

lists. A short list of recognisable ingredients is often looked upon positively, 

particularly by parents seeking to keep their children safe and healthy. 

• This is also the case for adults and this desire has been capitalised on by 

products such as Arla’s Cocio which simply contains milk, sugar and 1.5% 

fat-reduced cocoa. 

Implications: Short ingredients 

To view 

lists 

please 

with claims such as ‘natural’ and 

‘fresh’ are of appeal for products aimed at children and adults alike. 



to 2017 

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Country: USA 

Brand: Shamrock Farms 

Flavours: Vanilla, Chocolate and 

Strawberry 


What’s special? The brand 

emphasises the words “real, fresh & 

ideas” highlighting the provenance 

trend but also the wholesomeness of 

the product. 



5.1.3 Lactose-free milk 

• Lactose is a carbohydrate found only in dairy. Although not very sweet 

when processed lactose becomes a main element of the sugar-rich liquid 

in flavoured milk. 

• Lactose intolerance occurs when the enzyme lactase, which breaks down 

lactose into glucose and galactose, is absent from the digestive system. 

Symptoms include digestive pains, flatulence and diarrhoea. 

• Lactose intolerance is more common in certain ethnic groups than 

others, with a substantial proportion of the world suffering from the condition: 

- ~90% of people from Asian descent 

- ~60% of people from African descent 

- ~50% of people from Latin American descent 

• More than half of the world’s flavoured milk demand comes from Asia. 

Therefore, lactose-free propositions are vital to tapping into this market. 

• The desire for products free of lactose is also reflected in the rising 

popularity of dairy alternatives which are naturally free of lactose, such as 

soya, oat and nut milks. 

• Arla’s Lactofree range has been the main lactose-free flavoured milk 

proposition in the UK market, with a chocolate flavour available. 


to 2017 

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• In 2015, Mars launched a lactose-free Mars Milk product which is currently 

listed in Tesco. Uptake by major brands demonstrates how popular lactose 

avoidance is becoming. 

Implications: Short ingredients lists with claims such as ‘natural’ and 

‘fresh’ are of appeal for products aimed at children and adults alike. 



Country: UK 

Brand: Mars 

Flavours: Chocolate 


What’s special? This is the first foray for Mars 

into more specialised products in the flavoured 

milk category and highlights the rising demand 

for lactose-free products. 

5.1.4 Sugar reduction 

• Whilst milk drinks are exempt from the sugar tax announced in march 2010, 

reducing sugar content in products still remains a key issue. 

• A report by Public Health England, published in October 2015, claimed that 

all population groups in the UK are consuming too much sugar and that the 

recommended daily intake should be halved. 

• Consumers are becoming less focused on avoiding fats, and are 

increasingly looking to products with reduced sugar claims. 

• Sugar sweetened drinks have been particularly highlighted as a leading 

cause of excess sugar consumption and as a result, flavoured milk brands 

need to act to prevent being associated alongside high-sugar carbonated 

drinks. 


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44


Implications: Sugar reduction is one of the most important trends for 

2016 and it will be crucial for flavoured milk manufacturers to find sugar 

alternatives in their products. 



Country: UK 

Brand: Frijj 

Flavours: Choc-a-Chocolate and Seriously 

Strawberry 


What’s special? As the category leader, 

Frijj launching a reduced sugar variant is a 

response to significant public demand for 

flavoured milk without high levels of sugar. 

5.1.5 Nutritional benefits 

• Milk is a good source of protein and a high intake of protein is becoming 

increasingly desirable for many consumers, especially amongst gym-goers 

& dieters. Therefore, product reformulations with added amino-acids are 

likely be successful on the market in the medium term. 

• Consumers have an increasingly hectic and on-the-go lifestyle. UK adults 

have acknowledged that they have little time to prepare a nutritious 

breakfast or snack. However, people recognise the importance of a wellbalanced 

breakfast to fuel their day and are open to more flavoured milk 

breakfast propositions. 

• Older consumer segments are relatively untapped in the flavoured milk 

market. Focusing on particular nutritional and lifestyle needs of this 

generation could unlock new market opportunities. 


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Implications: Demand for a healthy, on-the-go snack has led to the 

creation of a flavoured milk sub-category focused on delivering 

necessary micro and macronutrients, in convenient packaging. 

Country: USA 

Brand: Fair Life 

Flavour: Chocolate 


What’s special? This milk is 

protein-enriched, and targeted at 

consumers away from traditional 

body-building markets. It is a recent 

example of the functional category 

blending with other sub-categories. 



5.2 White milk trends 

We have described some of the trends within the wider food and drink 

landscape, and their effects on the flavoured milk industry. However, there are 

trends specifically relating to the UK dairy industry, which need to be taken 

into account when thinking about flavoured milk NPD. 

5.2.1 Supporting dairy farmers 

• Many consumers are concerned about the responsible sourcing of 

flavoured milk’s main ingredient: white liquid milk. With farm-gate milk 

prices at rock-bottom throughout 2015/2016 many UK farmers are 

struggling. With growing media attention, more consumers are demanding 

a fair deal for dairy farmers. 

• Morrisons are paying attention to consumer demand for fair prices for 

farmers with their ‘Milk for Farmers’ proposition. Although this does 

not yet apply to Morrisons own-brand flavoured milk, it is a trend 

which should be monitored. 


to 2017 

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Implications: In time consumers may prefer flavoured milks that specify 

fairness in pricing and beneficial social impact - this is an opportunity for 

small dairies to innovate or enter the flavoured milk market. 



Country: UK 

Brand: Morrisons Milk for Farmers 

Flavour: White milk, cheese, 

yoghurt 


What’s special? These dairy 

products are sold at a slight 

premium, with extra money going 

back to farmers within the Arla milk 

buying cooperative. 

5.2.2 Innovative milk sources 

• As has been the case with alternative flavoured milk, we expect UK 

consumers to be open to trying flavoured milk from origins other than cows. 

One example is camels’ milk, recently launched in the UK under the Camel 

Milk brand. 

• Camels’ milk is close in composition to human milk, has a subtler flavour 

than goat and sheep milk and there is some research to say it can help 

prevent a variety of diseases including diabetes, IBS and hepatitis. It 

contains just 2% fat and contains no beta-lactoglobulin and a different 

beta-casein to cows’ milk. As these are two components of cows’ milk 

which commonly cause allergic reactions, camels’ milk offers a viable 

alternative for some allergy sufferers. 


to 2017 

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Implications: The plant-based alternative milk industry has shown that 

consumers are open to trying new ingredients, if they have a perceived 

health benefit such as allergy reduction. Innovative ingredients may 

represent new market areas. 



Country: United Arab Emirates 

Brand: Camelicious 

Flavours: Plain, Strawberry, Dates, Saffron 

and Chocolate 


What’s special? It is a nutritious and 

innovative type of milk that has been 

enjoyed for centuries. Could have beneficial 

health implications 

5.2.3 White milk NPD 

• The white liquid milk category has traditionally seen little innovation. 

However, a key value adding development has been that of filtered milk. 

Filtered milk uses filtration technology to extend shelf life without reducing 

nutritional content. 

• Filtered milk accounts for around 5% of the total milk market, with Arla’ 

Cravendale being the biggest brand. However, there are virtually no 

flavoured filtered products available. This is likely down to the limited 

number of processors with the appropriate processing technology. 

• In 2015 Arla launched their ‘Big Milk’ product, aimed at the specific 

nutritional needs of young children, with added vitamins and minerals. It is 

marketed as being a follow-on from formula milk whilst allowing children to 

enjoy fresh cow’s milk. Following this, in January 2016 Arla also launched 


to 2017 

48


their ‘Best of Both’ milk which tastes like semi-skimmed milk while being 

fat free. 

• These recent launches illustrate how the regular white milk category is 

seeing considerable innovation since value has been stripped from the 

category through the milk price war. 

Implications: Flavoured milk brands should take note of these recent 

product developments in the wider milk category, and consider how they 

can add value to product by considering the specific nutritional 

requirements of particular age groups 



Country: UK 

Brand: Best of Both Milk 

Flavours: White Milk 


What’s special? Arla’s Best of Both 

Milk has the fat levels of skimmed 

milk with the taste of semi-skimmed. 

It is an example of recent added 

value innovation in the white milk 

category. 

5.3 Flavoured milk trends 

In addition to wider trends in the UK food and drink industry and white milk 

market, there are also several key developments within the flavoured milk 

market that should be taken into account. 

5.3.1 Functionality driven NPD 

• New products in the flavoured milk market use the addition of innovative 

nutrients, vitamins and minerals to suite the health aspirations of different 

consumer segments. 


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• The Protein Drinks Co. have developed a new collagen based milk drink 

aimed at female consumers wishing to enhance their health and beauty. 

Collagen+ beauty milk is sold in outlets such as Superdrug, Holland & 

Barrett and Ocado. 

Country: UK 

Brand: The Protein Drinks Co 

Flavours: Plain and Sweetened 


What’s special? This flavoured milk is 

enriched with collagen and vitamins, 

promoting well-being and beauty for 

women. It is a good example of a 

targeted adult flavoured milk proposition. 



Collagen + Beauty Milk: health claims 

• “Collagen+ Beauty Milk is a truly unique collagen beauty drink rich 

in essential vitamins, potent antioxidants and hunger-fighting 

protein! Occasional usage is recommended at breakfast or in 

between meals as a convenient healthy snack.” 

• Some clinical studies support the idea that ingesting collagen 

peptides can help reduce the appearance of skin wrinkles and 

improve joint health. However, more research needs to be done 

substantiate these claims.. 

• Collagen has also been shown to have a higher satiating effect than 

other proteins such as casein, making it a potential ingredient in 

weight control drinks. 

There are also various opportunities for functional drinks to enter the health 

market, including milk-based energy and relaxation drinks. With recent 

findings of milk coming from cows during the night containing elevated levels 


to 2017 

50


of tryptophan and melatonin, two substances found to reduce anxiety and aid 

sleep, it seems only a matter of time before a brand looks to market 

5.3.2 Flavour driven NPD 

As we have seen in previous chapters, pitching flavoured milk to the adult 

population is an under-developed route and holds out commercial promise for 

brands who can manage this successfully. This is why we are seeing more 

interest in translating flavours that are already popular amongst adults into the 

flavoured milk market. 

Popular flavours include: 

• Sticky Toffee Pudding 

• Carrot Cake 

• Millionaire’s Shortbread 

• Cherry bagel 

• Cheesecake 

• Lemon meringue pie 

• Flapjacks 

• Rocky Road 

Country: Australia 

Brand: Nippy’s 

Flavour: Iced To Honeycomb view please 

Launch purchase date: 2012 full report 

What’s special? This brand is a unique flavour, 

with both adult and child appeal. 


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Country: United States of America 

Brand: Hershey’s 

Flavour: White Chocolate 


What’s special? Although, within the UK, 

confectionery flavours are not new, white 

chocolate flavour is still not as established 

as milk chocolate and has been the focus of 

NPD in the dessert category. 

Country: Taiwan 

Brand: Greenmax 

Flavour: Boba Milk Tea Powder 

Launch To date: view 2011 please 

What’s special? Although this product is 

powdered, the flavour is worth mentioning as it 

aligns with the tea-keen palates of UK adults 

and the growth of green tea as a healthy 

proposition. 



Brand: Peeps 

Flavours: Chocolate Marshmallow, 

Marshmallow, Easter Egg Nog. 


What’s special? These seasonal flavours are 

examples of how to take advantage of the 

different retail opportunities across the trading 

year.



Brand: Arriba 

Flavour: Horchata (cinnamon) with rice milk 



What’s special? This flavour is taken from a 

traditional Central American drink. This is a 

good example of taking tried and true adult 

flavours into the category. 


Whether these new flavours will compete in the confectionery category or in 

the traditional flavoured category remains to be seen. 

• The on-the-go lifestyles of consumers have implications for flavoured milk 

packaging and branding, as the convenience trend continues to gather 

pace. 

• Innovation will most likely come from the functional drink offer and 

flavoured milk being used as a convenient snack that surpasses energy 

drinks in terms of both the perceived health benefits and its natural 

attributes. 

5.3.3 Formula innovation 

Some products have gone beyond experimenting with new flavours, to 

innovating recipes and formulas. 

Country: India 

Brand: Vio 

Flavours: Very Berry, Fresh Citrus, 

Tropical Colada, Exotic 


What’s special? This flavoured milk has 

a twist as it is carbonated. It remains to be 

seen whether carbonation and dairy are a 

sustainable commercial match. 



53 

© 2016 Teepee Limited. All Rights Reserved.


5.4 Packaging 

Premium flavoured milk depends on a unique value proposition and packaging 

that serves its consumers’ needs. The coffee sub-category has done this 

successfully by offering packaging that is convenient and stylish. Brands such 

as Frijj and Starbucks have used packaging, shape and branding cues to 

deliver a sophisticated feel to packaging. 

Packaging plays an important role in shaping consumer experience, 

particularly for flavoured milk. Packaging has a strong influence on how 

flavoured milk brands are perceived. This is true for form (size, sleeve, shape 

& branding) as well as function (technology, cap & size). The availability of 

capacity to process and pack flavoured milk has a bearing on packaging. Many 

brands have very similar bottle shapes and size as there are relatively few copackers 

in the UK 

5.4.1 Attitudes towards packaging in the UK 

Many UK adults dislike excessive packaging and desire ease in the handling 

of packaged goods. Most flavoured milk is presented in portioned sized onthe-go 

formats. Usage and occasion is a driver of packaging but there is a 

long way to go in terms of flavoured milk innovation in packaging format. 

5.4.2 Packaging evaluation 

We’ve profiled flavoured milk packaging under the following criteria: 

environmental impact, cost-effectiveness from the perspective of the 

producer, safety, aesthetics and convenience. 

54 



The scorecard (figure 5.3) shows HDPE and PET plastics are similarly suitable 

for flavoured milk packaging. PET is more aesthetically pleasing but HDPE 

has a smaller environmental impact as less energy is used in the production 

and recycling of HDPE bottles. 

Cartons, such as Tetrapak, score consistently in all categories but are not as 

simple to recycle as plastic alternatives since they are formed by several 

layers. 

Glass was seen as least suitable as a packing material. It is not appropriate for 

children, is heavy for the consumer and also has a high eco-impact. 



Figure 5.3: Suitability of different packaging materials for flavoured milk under 

different categories. ‘+’ denotes poor performance, ‘++’ denotes a medium 

performance and ‘+++’ denotes good performance. 

5.4.3 Sports caps 

Flavoured milk producers must design and innovate in order to successfully 

address consumers’ lifestyles and needs. With the exception of recent 500ml, 

55 



750ml and 1-litre formats, flavoured milk is mainly available for on-the-go 

consumption in plastic bottles or Tetra Pak cartons. 

Mars Refuel have seen considerable commercial success with their sports cap 

format. This can be attributed to a range of consumer lifestyle factors: 

• Convenience e.g. value added feature for consumers with active lifestyles 

who see Mars drinks as a quick recovery after exercise. 

• The perceived status enjoyed by consumers carrying a bottle with a 

sports cap. 

• Consumers’ willingness to pay a premium for enhanced packaging. 

• The perceived potential to avoid spillage - important to parents. 

Advantages 

Convenient for consumption 

Disadvantages 

Disadvantages 

Expensive for manufacturer 

Association with a “sporty”, 

active lifestyle 



Requires manufacturing to be 

altered from foil seal - cost 

Avoids spillage 

Potential child choke risk 

Supports a higher price point 

Seal integrity 

Figure 5.4: Advantages and disadvantages of the use of sports cap in flavoured milk 

packaging in the UK. 

Mars uses a sports cap for some of its confectionery propositions including 

Bounty, Galaxy, Snickers and Mars flavoured milk drinks. For Goodness 

Shakes also use sports caps for their ‘Kids on the go’ range, aimed at active 

and sporty children. 

56 



6. SEGMENTING FLAVOURED MILK: 

THE POWER CATEGORIES 

Segmentation sees the flavoured milk market divided into six ‘power 

categories’. This chapter looks at each of these power categories in turn: 

traditional flavoured milk, functional drinks, coffee, confectionery, breakfast 

and alternative flavoured milk. 



Figure 6.1: The HRA flavoured milk ‘power categories’ 

For each category, we explore the two flagship brands featured in the pyramid 

above and examine products, advertising, marketing and financials. The 

percentages beside the categories give an approximate indication of the 

relative weighting of the categories sales to the UK flavoured milk market as a 

whole. 

6.1 Traditional flavoured milk 

Traditional flavoured milk dominates the market. It is the biggest sub-category 

in terms of volume sales with our estimate being that it makes up just under 

half the flavoured milk category. ‘Traditional’ offerings usually comprise of 

cow’s milk with added sugar and natural or artificial flavours. These products 

57 



have been available in UK supermarket aisles for over two decades in their 

present form and are usually found alongside white liquid milk with typical 

flavours including chocolate, strawberry, vanilla and banana. 

Chocolate is the best-selling 

flavoured within the traditional 

power category. 

To Traditional view please 

purchase category full report 

trends 

Strawberry is the second most 

popular traditional milk 

flavour. 

Yazoo & Frijj are the main volume 

brands within this category. 

Supermarkets are most likely to 

develop own brand propositions in 

this category. 

Figure 6.2: Trends within the traditional flavoured milk power categories. 

6.1.1 Traditional flavoured milk case study: Frijj 

Brand Growth: 7% in 2014/15 



Product Variants: Confectionery and 

traditional flavoured milk 

New product developments: Frijj 40% 

sugar-reduced and Frijj Supreme 

Target consumers: Children and teens 

58 



• Frijj is a flavoured milk brand created in 1993 and is now the UK market 

leader. Frijj was sold by Dairy Crest to Muller in December 2015 as part of 

the wider sale of the Dairy Crest operation. 

• Frijj is currently available in 5 flavours in the traditional category: Full of 

Fudge Brownie, Choc-a-Chocolate, Seriously Strawberry, Burst of Banana 

and Mucho Cookie Dough. 

• Frijj released a ‘Supreme’ range in 2013, to appeal to older more 

sophisticated palates. Flavours include: Honeycomb Choc Swirl, Sticky 

Toffee Pudding, Banoffee Pie and White Choc Raspberry Swirl. 

• According to Dairy Crest, Frijj has consistently increased its market share 

each year, rising 1.9% in 2014 and 2% in 2015. 

• Frijj UHT was launched in 2012 with the intention of taking a share of the 

convenience sector where a longer shelf life and ambient storage is often 

key for retailers in terms of shelf life. However, the UHT proposition has 

struggled to gain traction due to price point and sizing. 

• Since its launch in 1993 the distinctive shape and design style of Frijj 

packaging has been kept largely the same (see figure 6.3). The brand has 

used marketing campaigns featuring characters from The Simpsons to 

appeal to their core consumer audience. More recently they have been 

making an effort to appeal to older consumers with their coffee and 

premium style products. 

59 



1993 

Frijj 

launch 

April 2009 

Simpsons 

limited 

edition 

flavours 

Aug 2011 

‘Incredibles’ 

range 

launched 

Oct 2013 

‘Incredibles’ 

rebranded as 

‘Supreme’ range 

March 2014 

Coffee 

range 

launched 



Dec 2014 

Core 

range 

redesigned 

Feb 2015 

40% reduced 

sugar range 

launched 

Figure 6.3: History of Frijj flavoured milk products and packaging 

• Since its launch in 1993 Frijj’s packaging remained fairly constant for 20 

years - with the trademark Holstein cow pattern - until 2013 when the 

Supreme range was launched. 

The Supreme range, launched in 2013, uses premium branding cues to 

confer a more indulgent product. The core range followed suite in late 2014, 

with a complete redesign of packaging. 

• In 2015 Frijj launched a 40% reduced sugar product, the first of its kind on 

the UK market. The packaging is largely the same as the standard product, 

though uses blue labelling to make it distinct. The use of the light blue 

colouring to confer reduced sugar is becoming standard in the wider food 

and drink market with products such as Heinz Baked Beans & Nestle Oat 

Cheerios Low Sugar. 

60 



Oct 2008 

Digital campaign 

launched based on 

spoofs of US horror 

films. Backed up by 

online and print 

advertisement 

Aug 2009 

£2m deal to sponsor 

Sky TV’s football show. 

Included 15 second 

show indents and 5- 

second break bumpers 



Aug 2011 

Advertisement was launched for 

the Incredibles range including 

the online ‘You LOL You Lose’ 

face recognition game, profiles on 

characters in the range, iPhone 

apps and outdoor advertisement 

Figure 6.4: Frijj advertisement campaigns 2008-2011 

Frijj advertising has traditionally been fun and well-suited to their core 

demographic of older children and teenagers. Their sponsorship of Sky TV’s 

Soccer FM show is an attempt to widen the appeal to active consumers and 

older adult males. 

6.1.2 Traditional Flavoured Milk Case Study: Yazoo (Friesland Campina) 

Friesland Campina Profit: €192 million (up 

84.6%) in 2015 

Product variants: Traditional flavoured milk 

NPD: Yazoo Smoothie 



Target consumers: Children and teens 

• Friesland Campina, the manufacturer of Yazoo, is in the top 6 global dairy 

companies. The cooperative is the result of the 2007 merger between 

Friesland Foods and Campina, and uses milk from farmers in the 

Netherlands, Germany and Belgium. 

61 



• Yazoo, the second best-selling flavoured milk brand in the UK, has slowly 

increased its market share over the course of the past 5 years to almost 

match Frijj. Market share growth was 1.6% in 2015 after stagnating in 

2013. 

• The traditional flavours are banana, chocolate and strawberry. The vanilla 

flavour was a limited edition product which became a permanent fixture in 

September 2014. The size formats sold include 200ml, 250ml, 300ml, 

475ml and 1-litre in both plastic bottle and Tetra Pak carton. 

• In comparison to its rival, Frijj, Yazoo has remained largely the same since 

its launch, with the same flavours available and no real limited edition 

flavours or variants introduced, except for vanilla (see figure 6.5). The 

products are classic, traditional flavoured milk aimed at primarily at 

children, teenagers and young adults. 

1990’s 

Yazoo 

Launched, 

featuring 

dinosaur 

Oct 2011 

Revamped packaging to 

highlight health 

credentials- ‘more milk, 

low in fat’ 

April 2014 

Vanilla product 

re-launched 

Apr 2015 

Fully recyclable 

bottles 

launched 

May 2006 

Launched 200ml 

single serving 

packaging 

May 2013 

On-the-go 250ml 

bottle 

launched 



June 2014 

1 litre family 

packs launched 

Figure 6.5: History of Yazoo flavoured milk products and packaging 

62 



Feb 2001 

Dino cartoon 

character fronting 

advertising on 

Cartoon Network 

& Fox Kids 

Jan 2003 

Joint promotion 

with Schools 

Football Initiativeon-pack, 

TV, 

Radio & press 

June 2006 

Promotion with 

new Garfield film, 

offering family 

safari. Supported 

by £3m campaign 

May 2008 

£1.7m campaign 

of outdoor 

advertisements, 

with the strapline 

‘Milk. Shaken Up” 

Feb 2010 

New ad launched 

featuring cow 

being shot from a 

canon- ‘Milk. 

Shaken Up’ 



July 2010 

Team up with 

download site 

‘Napster’- free 

music downloads 

on pack 

Mar 2012 

1970’s style ad 

the ‘Shake Squad’ 

features in £2m 

TV and social 

media campaign 

May 2014 

£1m outdoor 

advertisement 

campaign 

Figure 6.6: Yazoo advertisement campaigns 2001-2014 

Yazoo’s advertisements have been humorous and aimed at younger 

consumers with promotions such as music downloads and cinema tickets. The 

May 2014 campaign had a simple focus on the goodness of milk, appealing to 

gatekeeper parents as well as the direct consumers. 

6.2 Functional milk: sports nutrition milks 

Sports nutrition is a rapidly growing market in the UK. Milk is a rich source of 

nutrients that can be fractioned into a wide range of components (i.e. whey 

protein, casein etc.) and used to boost the protein value of flavoured milk 

drinks. 

63 



In recent years, the public has become increasingly aware of the impact of 

protein in their diets, in particular that protein: 

• Helps develop muscle mass and lean tissue, and aids strength 

training. It does so by stimulating muscle synthesis and suppressing 

protein breakdown. 

• Supports weight control because it has a satiating effect and 

increases the metabolism for a longer period of time than other 

macronutrients. 

• Contributes to lower blood pressure and is therefore useful for 

individuals with hypertension. 

• Increases bone density leading to decreased risk of osteoporosis 

• Aids cardiac health – evidence suggests that by eating less 

carbohydrates and more protein leads to a decreased risk of 

cardiovascular disease. 

However, although the consumption of protein is essential for the correct 

functioning of the human body, most people in the UK are not at risk of underconsuming 

protein. 

6.2.1 Human protein requirements 

Protein requirements are determined by the body’s nitrogen balance. That is 

the difference between the intake and output of nitrogen. A healthy adult with 

enough protein will roughly consume and excrete the same amount of nitrogen 

each day. 

In growing children, pregnant women or a person recovering from protein loss, 

there is typically a positive balance where the intake of nitrogen is greater than 

the output as the body is increasing total body protein. This means that 

growing children, pregnant women and a person recovering from an injury all 

require higher levels of protein intake. 

64 



6.2.2 Protein over-consumption 

Protein drink manufacturers must be aware that that exceedingly high levels 

of protein intake could be linked to the development of chronic diseases. 

However, this is a controversial debate, with arguments for and against the 

health benefits of high protein flavoured milks. 

Arguments against excessive 

protein consumption 

Foods rich in protein i.e. meat and 

dairy, are often high in saturated fat. 

Kidneys can be harmed by too much 

protein. 

The defence for 

protein drinks 

There is evidence that saturated fat is not 

as unhealthy as once thought. 

Research suggests excessive protein 

consumption only exacerbates existing 

kidney conditions. 

Filling up on protein means eating less 

vegetables, fruits and wholegrains. 

This could result in nutrient 

deficiencies. 

Protein drinks are not intended as longterm 

meal replacements and are only 

recommended as part of a healthy diet. 



Consuming high levels of protein 

means more calcium is excreted from 

the body, leading to calcium 

deficiencies. 

Excess protein is converted to fat in 

the body so can result in weight gain 

Excessive protein consumption can 

raise the risk of hyperaminoacidemaia, 

and hyperinsulinemia nausea. 

Protein from dairy sources contains 

calcium. 

Products are aimed at active consumers 

so weight gain should not be an issue. 

Protein drinks only offer a fraction of the 

daily limit and, as long as they are used 

responsibly are safe. 

Figure 6.7: Arguments for and against consuming high protein products 

Demographic Age (years) Reference intake (g) 

Infant 0-1 9-11g 

Child 1-8 13-19g 

Male 9-13 34g 

Male 14+ To view please 56g 

Female purchase 9-13 full report 34g 

Female 14+ 46g 

Pregnancy/ lactation - 71g 

Strength athletes - 1.2-1.7g/kg bodyweight 

Endurance athletes - 1.2-1.4kg/kg bodyweight 

Figure 6.8: Differing recommended daily protein intakes by demographic (US Food 

and Nutrition Board, 2002). 

65 



In the Western hemisphere, there is little chance of adult protein deficiency as 

the staple carbohydrates in diets also provide some levels of protein. Although 

some children require more protein, in the West most children consume more 

protein than is needed. 

• Adults are advised to consume between 46g and 70g of protein per day 

(see figure 6.8), or a maximum amount of 1g protein per kg of body weight. 

The exceptions are woman who are pregnant or lactating, and strength/ 

endurance athletes, who have higher protein requirements. 

• In developed countries, the daily intake of protein far exceeds the 

nutritional requirements in the range of 80-100g of protein per day. 

• Older people may have higher protein requirements than that of the middleaged 

population. One study claimed that women aged 80-87 would benefit 

from consuming 29% more protein than current guidelines recommend 

(Tang, 2014). There are opportunities for flavoured milk producers with this 

segment, as the previous NPD chapter highlighted. 

• Protein should be consumed in small quantities throughout the day as 

opposed to large quantities once a day. This is the optimal way of 

absorbing protein as, if too much is consumed at any one time, it will 

become a waste product of the body. 

6.2.3 Sports nutrition drinks & VAT 



Figure 6.9: Flavoured milk brands that are liable for VAT 

66 



In 2012, value added tax (VAT) was introduced to sports nutrition drinks, 

defined by HMRC as drinks that are: 

“Marketed as supplying energy to enhance performance, 

accelerating recovery after exercise, providing energy, or building 

bulk and often contain creatine.” 

There is a particular provision, however, made for “milk and preparations and 

extracts thereof” and “meal replacement drinks for slimmers or invalids”, 

both of which remain exempt. 

“Milk will remain zero-rated even if promoted as benefiting 

consumers taking part in sports activity. Although products such as 

meal replacements for dieters may be a similar product to a protein 



supplement used by athletes, they are aimed at different markets.” 

HMRC, 28 June 2012. 

Therefore, VAT does not apply to flavoured milk, and a market opportunity 

persists for products that are marketed as a slimming aid or as a meal 

replacement. 

6.2.4 Sports nutrition drinks: key facts 

Sports nutrition has seen many developments in the last few years. Several 

factors have contributed to this growth, which are described in figure 6.10. 

Despite these positive growth factors there is evidence that consumers are 

confused by the array of sports nutrition products on offer and the health 

claims they make. Consumers are often unclear what the products do for them 

and what the differences are between them. 

67 



Packaging 

The development of smaller, convenient 

bottles has been driving growth in ‘sports 

nutrition’ flavoured milks. 

NPD 

Consumer 

Knowledge 

Clever promotions, smaller formats and 

product reformulation have pushed growth 

forward. 



Increased consumer education is a key 

lever in increasing demand for protein 

products. 

Brand 

Sports nutrition consumers identify with 

brands that express their personality, 

values and lifestyle 

Figure 6.10: Factors contributing towards the consumer interest in sports nutrition 

drinks 

Other flavoured milk categories have taken note and are launching variants to 

satiate the growing demand. Starbucks (coffee) and Weetabix (breakfast) have 

developed protein-rich formulas to defend and extend their market share. 

Most flavoured milk beverages with added protein are also sources of what 

some experts define as excessive levels of sugar. This combination may 

ultimately deter consumers from buying protein drinks. This should be 

something manufacturers should be aware of, especially as health advice is 

meaning consumers are becoming more health conscious. 

68 



Aimed at consumers wanting to 

build muscle mass, such as strength 

athletes & body builders. 

Targets mainstream 

health conscious consumers. 


Key consumers are endurance 

athletes 

purchase 

who wish 

full 

to recover 

report 

from 

training. 

Consumed by slimmers, who want 

to get that full feeling that high protein 

provides without the fat and sugar. 

Aimed at image conscious woman, 

who believe in the beneficial effects of 

protein and collagen. 

Figure 6.11: Examples of different protein based flavoured milks and their key 

consumer targets 

69 



6.2.5 Functional milk case study: For Goodness Shakes (Aurivo) 

Aurivo Turnover: €447m (2014) 

Growth CAGR Growth: 13.5% (2014/13) 

Product variants: Functional drinks 

NPD: Sports Recovery & Protein On-The-Go 

Target consumers: Active children, teens, 

slimmers, strength and endurance athletes & 

casual gym goers 



For Goodness Shakes is a flavoured milk brand that targets a variety of 

athletes with its range of protein products. It was originally developed by the 

company My Goodness Ltd, founded in 2003. Aurivo, the Ireland-based 

agribusiness purchased My Goodness Ltd in 2015. 

For Goodness Shakes comes in several varieties: 

. 

• For Goodness Shakes® Ultimate Protein (Chocolate and 

Strawberry) is their highest-protein product with 40g of protein per 

serving. This is targeted at consumers who are interested in muscle 

development and are knowledgeable about their nutritional 

requirements. 

• For Goodness Shakes® Protein Nutrition (Chocolate, 

Strawberry and Café Latte) contains 20g of lean milk protein with 

added nutrients. This product is their most mainstream product, 

aimed at consumers interested in slimming and general health. 

• For Goodness Shakes® Recovery, is their main product and 

comes in Chocolate, SuperBerry, Vanilla and Banana. Its ratio of 

carbohydrates to protein is 3:1, containing 17g of protein. This 

product is aimed at those for whom hydration and endurance are 

important, i.e. endurance and cardio sports. 

• For Goodness Shakes has also developed a line aimed 

at active children and teens called Kids on the Go (formerly 

Milk Shoot). It is a convergence between protein and 

traditional flavoured milk. 

70 



• Since launching in 2005, For Goodness Shakes packaging has evolved to 

in order to appeal to its core audience of athletes and active consumers. 

• The original packaging brand name made the products approachable for 

mainstream consumers, who might be deterred by the ‘hard-core’ sports 

nutrition products. This has helped increase growth and made the brand 

appealing to retailers such as Tesco and Sainsbury’s. 

• Over time, the brand has diversified with new sub-ranges aimed at specific 

consumer groups, using distinct packaging to match. With the launch of 

the Kids on the Go product in 2014, a more child appropriate design was 

developed 

Apr 2005 

For Goodness Shakes 

launched. Aimed at 

men. 



Apr 2013 

Launched For 

Goodness Shakes 

High Protein 

Sept 2014 

Launched ‘Milkshoot’ 

for 

children. 

Apr 2014 

Launch of low-fat 

and super-high 

protein varieties. 

Figure 6.12: For Goodness Shakes packaging evolution 

For Goodness Shakes’ advertising has been targeted at an active, male 

audience, appealing across a spectrum from light ‘January exercisers’ to 

cyclists, runners and weightlifters. Their online video campaign in 2013 was 

banned by the ASA, though was intended as a tongue in cheek appeal to 

young, male adults 

71 



Jan 2008 

£800k Muscles of 

Steel campaign. 

Aimed at gym 

goers and 

January 

exercisers. 

Dec 2010 

£1m campaign 

targeting sports 

players and 

athletes in Men’s 

Health Magazine. 

& online 

Jan 2011 

On pack 

promotions 

offering free 

personal 

training 

sessions. 

Aug 2010 

On-pack 

promotion with 

a 1000 Veranti 

Milook bikes. 



Aug 2011 

Sponsors of 

Tour of Britain 

and Survival of 

the fittest. 

Nov 2013 

Controversial TV 

advertisement aimed 

at younger men. 

Banned by the ASA. 

Figure 6.13: For Goodness Shakes advertising campaigns 

6.2.6 Functional milk case study: Dunn’s River Nurishment (Grace Foods) 

Grace Foods profit: $37.2bn (2014) 

Growth (2014/13): 20.56% 

Product variants: Functional drinks 

NPD: Nurishment Active (2013) 

Target consumers: Active children, teens, 

slimmers, strength and endurance athletes, 

casual gym goers and the health-conscious 



• Nurishment Original was one of the first functional milk drinks in the UK 

market and has been present for more than 20 years. 

• This “nutritionally enriched milk drink” is available in seven flavours in its 

400g ring-pull can format: Vanilla, Banana, Strawberry, Chocolate, Peanut, 

Raspberry and Mango. This ring-pull can format is unique in the flavoured 

milk category, but have gained a loyal consumer following, especially from 

the Afro Caribbean market. 

72 



• In 2013, Nurishment launched an on-the-go variant to compete against the 

other sports ready-to-drink products in the market. Nurishment Active has 

35g of protein per bottle, doubling the protein content of Nurishment Extra, 

but is also available in the same three flavours: Strawberry, Chocolate and 

Vanilla. 

1980’S 

Nurishment 

Original developed 

in iconic ring pull 

can. 

2009 

Launch of 

Nurishment Extra 

ready-to-drink in 

plastic bottle. 



2013 

Launch of 

Nurishment Active 

high protein drink 

in bottles. 

Figure 6.14: Evolution of Nurishment packaging and product development. 

• The Nurishment Extra product is more of a mainstream flavoured milk 

concept with the bright colours and unintimidating branding typical of 

traditional flavoured milk. This product has allowed Nurishment to target 

more mainstream consumers who may be deterred by the can format. 

• The Nurishment Active product was the brand’s attempt at targeting the 

sports nutrition category with a specific product, moving away from the can 

format and towards the on-the-go, bottle format that is common in the 

category. 

73 





Aug 2013 

To accompany launch into 

sports nutrition, Nurishment 

created a new website to 

appeal to sports people to 

push their limits, with the 

strapline ‘I Say When’. 

Nov 2013 

National advertising 

campaign launched: 

- On-pack promotions 

- London Underground 

- Outdoor 

- Press 

Figure 6.15: Nurishment advertising campaigns 

Nurishment advertising in recent years has focused on appealing to its target 

audience of active consumers, with a focus on extreme sports players. The 

advertising push has centred around outdoor, print, on-pack and online 

activation. 

6.3 Coffee flavoured milk 

• Coffee continues to go from strength to strength as British consumers 

move away from tea, the traditional UK drink, to a greater taste for coffee. 

• Flavoured milk is a good carrier for coffee as a flavour – it mixes well and 

brings out the qualities in the coffee and there has consequently been a 

high level of innovation in this segment. 

• It is an area where own label struggles to cut through and where innovation 

in flavour and packaging format e.g. glass, cup shaped bottles, is key. 

74 



Cappuccino 

Skinny Coffee 


purchase Chocolate full Coffee report 

Caramel Coffee 

Strong Coffee 

Figure 6.16: Different varieties within the coffee flavoured milk sector 

6.3.1 Coffee flavoured milk case study: Starbucks (Arla) 

Profit: €5.13 billion 

Growth Volume: H1 2015 2.4% 

Product variants: Alternative, coffee, 

functional and traditional flavoured milk 

NPD: Lactofree, Sugar-Reduced flavoured 

milk, high-protein flavoured milk 

Target consumers: On-the-go professionals 



75 



• Starbucks, the High Street coffee shop, entered the UK market in 1998. 

• Their ready-to-drink coffee drink was launched in late 2010 through a 

partnership with Arla Foods, who provided licenses for the brand to 

manufacture, distribute and market the drink. 

• The first drinks launched were Starbucks VIA® instant coffee, Starbucks 

Discoveries® chilled latte and Starbucks Doubleshot®. 

launched Starbucks Bottled Frappuccino®. 

In 2011, it 

• The Starbucks license has grown to become one of the market leading 

chilled coffee drinks in the UK. 

Apr 2010 

Launch of 

‘Discoveries’ readyto-drink 

range. 

Nov 2012 

Festive red cup 

launched for limited 

edition Caramel 

Macchiato. 



Apr 2015 

Launch of Starbuck 

Discoveries 

Cappucino. 

Apr 2010 

Launch of ‘Doubleshot’ 

ready-to-drink 

flavoured milk. 

2013 

Rebranding of 

Discoveries and 

Doubleshot drinks. 

Figure 6.17: Evolution of packaging and flavours in Starbucks coffee flavoured milk 

range 

The Starbucks packaging is designed to target those cosmopolitan, on-thego 

professionals who enjoy Starbucks but who are not necessarily able to get 

to an outlet. With this in mind, the packs are designed in a cup, to mirror the 

store format. Re-closable packs are not particularly important to the target 

consumers as image outweighs convenience and the product is single serve. 

The small sized packs of around 220ml make this feasible as a reasonable 

amount to consume in one serving for their core audience of busy commuters. 

76 



2010 

Launch of Starbucks Discoveries 

supported by a heavyweight 

marketing campaign including: 

- Outdoor posters 

- In-store adverts 

- Social media campaign 

- Magazines 

- Radio 



2015 

Doubleshot TV commercial 

launched, featuring an office 

worker and a horse. 

Strapline- “the office 

workhorse is no match for 

the guy who drinks Starbucks 

Doubleshots” 

2011 

Bottled Frappucino launched 

with an advertising and 

sampling campaign including: 

- Summer events 

- Capital Radio Ball 

- Cinema 

- Outdoor 

- Online and print 

Figure 6.18: Starbucks advertisement for Discoveries, Frappucino and Doubleshot 

As Starbucks is such a well-known brand in the UK, advertising campaigns 

focus on introducing new products rather than building brand awareness. 

Launches of new drinks and flavours typically focus on print advertising, radio 

advertising and events sponsorship. Until 2015 Starbucks had never done any 

TV advertising for their range of bottled drinks. The Doubleshot 2015 

commercial targeted their core audience of busy professionals who would 

consume Doubleshot as a pick-me-up throughout the day. 

6.3.2 Coffee flavoured milk case study: CAFFE LATTE (Emmi) 

Turnover H1 2014: CHF 1,626 million 

Growth Sales: H1 2014: 3.7% 

Product variants: Coffee 

NPD: Expresso Zero, Flat White 

Target consumers: On-the-go 

Professionals 



77 



Emmi is a Swiss dairy company that launched its coffee products in the UK in 

2004 and has done much to pioneer the flavoured milk coffee market. Its line 

of ready-to-drink chilled coffees come in five flavours: Cappuccino, Skinny, 

Espresso Zero, Vanilla and Caramel. 

This range of flavours aims to satisfy a variation of strengths (intense, medium 

and mild) and different tastes in coffee (less sugar, low calorie, flavoured and 

decaf). Its Espresso Zero version, which positions itself as a ‘no sugar added’ 

and ‘no lactose’ alternative to its already well established drinks, was launched 

in 2015. 

Jul 2004 

Launch of Caffe 

Latte ready-todrink 

chilled 

coffee drink. 

Jan 2012 

Launch of 

limited edition 

vanilla ready-todrink 

offering 

Dec 2012 

Rebranding of 

low-calorie option 

to ‘skinny’, to 

bring in line with 

coffee shops. 



Jul 2014 

Launch of ‘Mr Big’ 370ml 

product aimed at men, 

and on the road 

convenience bottles. 

Dec 2014 

Launch of Choco 

Lait drinks aimed 

at women, in 

caramel and 

original. 

Oct 2015 

Seasonal ‘Winter 

Collection’ cup 

launched for festive 

season. 

Figure 6.19: Evolution of Caffe Latte packaging and products 

Emmi Caffe Latte has been available in the market since 2004. Like Starbucks, 

they utilise a cup format for their small portion sizes of around 230ml – plastic 

has proved an attractive packaging material for their distinctive cup format. 

The packaging design hasn’t changed much from the original launch, but they 

did re-brand slightly once they had launched more flavours to give more 

78 



standout to the brand name and colour differentiation. They recently launched 

a more convenient UHT bottle format, differentiating them from their rivals. 

Jun 2012 

Campaign to encourage woman 

to take a ‘fantasy’ and blissful 

break from daily tasks. 

Strapline- ‘Another fresh 

fantasy brought to you by 

Emmi Caffe Latte’. 

Placed on public transport & in 

retail outlets. 

Apr 2013 

Short films celebrating New 

York coinciding with the 

launch of Caramel New York. 

Features celebrities on their 

favourite places in the city. 

Films released on social 

media, with chance to win 

trip to NYC. 



May 2015 

Campaign to engage brands 

key audience, built around ‘100 

# Fresh Kicks’ photo 

competition, giving away 100 

iPhone 6. Participation on 

social media and pack QR 

codes, supported by 

advertising campaign. 

6.20: Emmi Caffe Latte advertisement 2012-2015 

Advertising for Emmi Caffe Latte is primarily aimed at young, cosmopolitan 

women and plays on the escapist ritual of indulging in coffee. Originally 

advertising focused primarily on print advertising, but now utilises social media 

and filmography to increase brand awareness and encourage consumer 

engagement. 

6.4 Confectionery and dessert flavoured milk 

Confectionery flavoured milk is similar to traditional flavoured milk, but uses 

innovative flavours and indulgent textures. One of the key differences of this 

category is the occasion usage, with confectionery-flavoured milk being an 

occasional treat as opposed to an everyday purchase. However, this definition 

is limited and, as occurs with other categories, indulgence can be an everyday 

purchase. For example: 

79 



• Mars has launched their most popular confectionwry products as 

flavoured milk: Starburst, Galaxy, Skittles, Mars Bar. 

• Mars has also developed products that could easily be placed in the 

alternative or functional drink category: Mars Refuel with added protein 

and packaged with the sports for the functional category, or Mars flavoured 

milk without lactose in the alternative milk category. 

This segment holds many possibilities for innovation. This is the most 

straightforward category in which to innovate because opportunity lies in 

translating popular confectionery and dessert flavours into flavoured milk: 

• Sticky toffee pudding, white chocolate, rocky road, millionaire’s shortbread 

and carrot cake are just a few examples. 

80 



6.4.1 Confectionery milk case study: Mars 

Product variants: Confectionery and 

functional drinks 

To NPD: view Mars please Milk High-Protein and Mars 

Lactose-Free 

Target consumers: Endurance athletes, 

sports participants and active children 


Mars Chocolate Drinks and Treats Europe has launched a range of milk drinks 

that represent the leading confectionery brands they own: 

• Mars & Mars Caramel 

• Galaxy, Galaxy Caramel, Galaxy Mocha Latte 

• Bounty 

• Milky Way 

• Snickers 

• Skittles 

• Maltesers 

• M&M’s Peanuts 

In 2015 Mars launched a higher protein version of their Mars milk drink and, in 

June, they launched their lactose-free variant. 

81 



Apr 2010 

Mars 

launches 

flavoured 

milk range. 

May 2007 

Rebranded 

as ‘Refuel’. 

Oct 2007 

Enters sports drink 

market by 

packaging ‘Refuel’ 

in a 475ml sports 

cap bottle. 



Apr 2011 

Revamp packaging of 1- 

litre cartons, 330ml & 

475ml bottles. Features 

milk splash to highlight 

goodness of milk. 

Oct 2012 

Mars Refuel adds 

caramel variant to 

accompany launch 

of caramel Mars 

bar. 

June 2015 

Launch of 

Mars Milk 

lactose free. 

Figure 6.21: Evolution of Mars flavoured milk, products and packaging 

• Mars milkshakes have been available for over 13 years. While the branding 

has remained largely the same since its launch, the range of formats has 

diversified to cater to a wide range of consumers. 

• The rebranding to ‘Refuel’ and the launch of the sports cap format in 2007 

was a step towards appealing as an on-the-go product for active children 

and teenagers, rather than an indulgent treat for home. The addition of the 

milk splash in 2011 was another step towards appearing as more 

wholesome and natural. 

• The launch of the lactose-free variant in 2015 was a move to capitalise on 

the growing market for free-from products in the UK and a way of boosting 

the health perception of the brand. 

• Mars unveiled their first TV advertisement for the Mars Milk brand in 2009 

with the focus on promoting the creamy quality of the drinks, since then 

they have gathered a loyal following on social media and now utilise these 

platforms as a way to engage and interact with consumers. They run 

competitions and giveaways, and use the pages as a way of promoting 

new products such as Mars Caramel or Mars High Protein. 

82 



Jul 2009 

Mars unveiled first ever 

TV advertising campaign 

for their chilled drinks 

range. £1m activity 

highlighting creamy 

quality of milk based 

drinks. 



2012-2016 

Mars Milks have a large 

social media presence & 

use this to promote the 

brand, offer giveaways 

for costumers and 

promote new products. 

Figure 6.22: Mars milk drinks advertising campaigns 2009-2016 

Mars unveiled their first TV advertisement for the Mars Milk brand in 2009 with 

the focus on promoting the creamy quality of the drinks, and since then they 

have gathered a loyal following on social media and now utilise these platforms 

as a way to engage and interact with consumers. They run competitions and 

giveaways, and use the pages as a way of promoting new products such as 

Mars Caramel or Mars High Protein. In the same year, Mars announced a 

sponsorship deal with the Football Association. Renewed in 2013, it was a way 

to target active young men wanting a treat after their exercise routines. 

6.4.2 Confectionery milk case study: Gü (Crediton Dairy) 

Turnover: £63.03 million 

Growth Sales: 124.32% (2014) 

Product variants: Confectionery and 

traditional flavoured milk 

NPD: Salted Caramel Flavour Hot 

Chocolate 

Target consumers: More affluent, 

indulgence orientated consumer. 



83 



Gü is a dessert brand which has expanded into flavoured milk. Since 2014, 

the product has been made under licence by Crediton Dairy. Unusually, it is 

meant to be served warm, rather than being the on-the-go proposition that 

many other brands focus on. 

With the UK hot chocolate category dominated by powders, there has been 

successful innovation with chocolate ‘spoons’, which allow chocolate to be 

melted in hot water. This demonstrates the willingness of consumers to try 

new products in this category. The Gü product is clearly aimed at adults as an 

indulgent treat with premium black packaging and the relatively high chocolate 

content in the formulation. 

6.5 Breakfast ready-to-drink milk 

With the increasingly hectic lifestyles of UK consumers, on-the-go breakfast 

propositions have been growing in popularity. This desire for convenience was 

exemplified by the breakfast biscuit category which saw rapid growth from 

2010 when Belvita Breakfast was launched. 

As consumers began to realise that breakfast biscuit products are not as 

healthy as they appear, sales started to decline and only a considerable 

amount of innovation has kept the market going. Protein drinks have since 

entered the UK market as an on-the-go breakfast alternative, which is both 

more satiating and nutritious than many other available options. 

84 



This category is still in its infancy with Weetabix and Fuel the main brands 

available until the Australian brand, Up & Go, entered the market in 2015 with 

a large advertising and media spend. Oatly, the alternative milk brand, also 

launched an oat based dairy-free breakfast milk in 2014 in Scandinavia, but 

this is not available in the UK as yet. 

6.5.1 Breakfast milk case study: Weetabix on-the-go 

Weetabix Turnover 2014: £352bn 

Sales growth: -3.91% 

Product Variants: Breakfast 

NPD: Weetabix On-The-Go Protein 

Target consumers: Slimmers, children, 

professionals and commuters 



• The Weetabix Food Company became a subsidiary of Bright Food Group 

Co Ltd in 2003, and in 2015 became partially owned by Baring Private 

Equity Asia. 

• The company launched Weetabix on-the-go breakfast drink in 2014, a 

ready-to-drink product that intends to replace traditional breakfasts with a 

combination of protein, carbohydrates and fibre. 

• The company emphasises the drink’s convenience: “chill it, drink it, bin it 

and get on with your day”. 

85 



• The product is available in four flavours: Chocolate, Strawberry, Vanilla 

and Banana. In response to the high-protein trend, Weetabix launched a 

high protein variant in July 2015. This comes in three flavours: Strawberry 

& Raspberry, Blueberry & Blackberry and Vanilla. 



Jan 2014 

Launch of Weetabix Onthe-go 

breakfast drinks 

June 2015 

Launch of Weetabix Onthe-go 

Protein 

Figure 6.23: Evolution in Weetabix On-the-go breakfast milk, products and packaging 

Since its launch in 2014, packaging has remained the same. With generic 

branding that capitalises on the well-known Weetabix logo and style, it aims 

to appeal to all ages. With a 250ml bottle size it is suitable for most consumers. 

The protein product uses the silver packaging as a functional drink category 

cue to stand out on shelf as being more premium, with added benefits. 

2014 

£5m marketing campaign 

focusing on the drinks 

convenience. 

Included online, digital and 

outdoor adverts 



2015 

TV advert focusing on 

convenience of on-the-go drink 

if you have little time for 

breakfast. Strapline- ‘A proper 

breakfast- bottled’ 

Figure 6.24: Weetabix on-the-go advertising campaigns 

86 



The launch of Weetabix On-the-go was accompanied by a £5m marketing 

campaign, focusing on outdoor, online and digital activation. The television 

advertising focuses on targeting the busy on-the-go professionals who are too 

busy for a conventional breakfast. The strapline reads “A proper breakfast. 

Bottled” which helps to push the drinks convenience credentials. 

6.5.2 Breakfast milk case study: Fuel 10K 

Turnover 2014: £352,064,000 

Growth Sales: -3.91% 

To Product view Variants: please Breakfast 

NPD: Strawberry, Chocolate and Banana 

Target consumers: Males, on-the-go 

professionals, active consumers. 


Fuel 10K Liquid Breakfast was launched in 2012, and is designed for active 

people who want to find extra time in their day to achieve their goals. The ‘fuel 

your 10k hours’ strapline comes from a quote by writer Malcolm Gladwell, who 

wrote ‘if you want to become brilliant at anything, you need to practice for 

10,000 hours’. Fuel 10k is available in 5 flavours: Banana, Caffé Latte, 

Chocolate, Strawberry and Vanilla. Each Tetra Pak 330ml unit has 

approximately 241 calories with 5.3g of fibre and 20g of protein. 



Feb 2012 

Launch of Fuel 10k breakfast 

drinks 

Dec 2013 

Trial of Fuel 10k 

‘Full English’ 

Figure 6.25: Evolution of Fuel 10k breakfast milk, product and packaging 

87 



• The Fuel 10k branding is bold and masculine, and has not changed 

since its launch. The use of black helps the bottles to stand out amongst 

competitors who typically use less bold colours. The brand name is 

clear and the unusual image of the eye is designed to capture 

consumer’s curiosity 

• Fuel 10k uses clear colour differentiation across the range. It has 

retained the single serve Tetra Prisma pack format which allows it to 

stand out from competition yet fit in with the cereal aisle where it is 

placed. 

• 2013 saw the launch of Fuel 10k Full English, a liquid version of the 

much loved fried breakfast. Although this product was met with good 

reviews on the internet it is no longer on sale, suggesting consumers 

are not ready for such radical innovation. 

6.6 Alternative flavoured milk 

• The dairy-free market has seen significant growth as more consumers look 

to plant alternatives to cow’s milk for a variety of health and ethical reasons. 

• Dairy alternatives come from many sources including nuts, legumes and 

grains. 

• According to Alpro, over 4.7m households buy plant-based food and 

drink regularly. This growth is in part down to expansion away from the core 

audience of vegans to encompass mainstream consumers looking for healthy 

products. This has been helped by extensive innovation within the category as 

products moved on from soy milk to various nut-based drinks, desserts and 

yogurts. 

The lactose-free market has also expanded, with key players such as the Arla 

Lactofree range experiencing innovation and growth. 

88 



• Consumer awareness of lactose intolerance, and increasing wealth 

among ethnic populations with high prevalence of lactose intolerance could 

be driving this trend. 

• Flavoured drinks have naturally followed on from the rapid growth of the 

dairy alternative market. 

• While chocolate flavours still reign supreme in the mainstream market 

there are a small number of products with innovative flavours such as coconut 

& pineapple (Provamel), chai (Rebel Kitchen) and orange mango (Oatly). 

• There is clearly room for more flavour development, though the difficulty 

lies in blending the distinctive flavour of the base milks with other flavours. 

89 



6.6.1 Comparing dairy alternatives 

Soy 

Produced by • Same protein 

soaking dried content as 

soybeans. cow’s milk. 

• 

• Little saturated 

fat. 

Many 

products are 

fortified to 

increase 

• 

minerals esp. 

calcium 

Lactose-free 

Contains 

isoflavones 

which may help 

prevent heart 

disease. 

• High in 

phytoestrogens 

which can 

influence 

oestrogen 

levels. (Nagata et 

al., 2001). 

• 

• Curdles in 

Coffee. 

• 

• According to 

USDA, 94% of 

US soy crops 

are GM. 

Alpro 

Vitasoy 

Provamel 

Alpro 

Chocolate 

Vanilla 

Strawberry 

Almond 

Sweet, nutty 

taste. 

In 2015, 

Waitrose 

announced 

almond milk 

was its’ 

customers 

preferred 

dairy 

alternative. 

Comparable 

protein levels to 

cow’s milk. 

Little saturated 

fat. 

Almonds are 

high in vitamins, 

minerals, 

healthy fats and 

fibre. 

Production 

needs vast 

volumes of 

water. 

Many almond 

milks contain 

around 2% 

almond with 

high sugar 

levels. 



Almond 

Breeze 

Rude 

Health 

Eco Mill 

Alpro 

Provamel 

Eco Mill 

Agave 

sweetened 

Cacoa 

Vanilla, 

Alpro 

Dark 

Chocolate 

Hazelnut 

Smooth & 

creamy with 

rich hazelnut 

taste. 

Low in 

saturated fat. 

Contains 

vitamin E. 

Around 2.5% 

hazelnut with 

water and 

sugar the two 

main 

ingredients. 

Alpro 

Rice 

Watery 

consistency 

with sweet 

taste. 

Little natural fat 

No cholesterol 

Rice milk 

claimed to 

contain high 

arsenic levels. 

(Environmental 

Working Group) 

Rice 

Dream 

Rude 

Health 

Provamel 

Organic 

Rice, 

Coconut & 

Pineapple 

Low in calcium 

& protein, more 

carbohydrate 

than cow’s 

milk. 

Chocolate 

90 



Higher in 

saturated fat 

and lower in 

protein than 

other 

alternatives. 

Alpro 

Koko 

Diary Free 

Coconut 

Dream 

Rebel 

Kitchen 

Rebel 

Kitchen 

Chocolat 

Chai Mylk 

Alpro 

Almond 

Coconut 

Hemp 

Mild, slightly 

sweet taste. 

Often fortified 

with calcium 

and Vitamin 

D. 

Good 

alternative if 

allergic to dairy, 

nuts or soya. 

Rich in protein, 

magnesium and 

omega-3 and 6. 

Separates in 

coffee. 

Negative 

connotation of 

hemp distracts 

from the health 

benefits. 

Chi 

Good 

Hemp 


Oat 

Creamy, thin 

consistency 

and naturally 

sweet. 

Low in 

saturated fat, 

enriched with 

vitamins and 

calcium, high in 

fibre and iron. 

Good 

alternatives if 

allergic to dairy, 

soya or nuts. 

Contains more 

sugar and is 

higher in 

calories than 

some of the 

other milks. 



Curdles in tea. 

Oatly 

Alpro 

Oat 

Dream 

Provitamil 

Oatly 

Chocolate 

Orange 

Mango 

Figure 6.26: Comparing pro’s, con’s and flavours of different plant-based dairy 

alternatives. 

91 



6.6.2 Alternative milk case study: Alpro 

Alpro Turnover 2014: €385m 

Growth in Alpro Soya drinks: 6% (2015) 

EU Dairy Market Share 2014: 3.5% 

Plant-based 


Market Share 2015: 43.3% 

Target consumers: Vegans, weight conscious, 

health aware, people with dairy allergy/ intolerance 

Product Variants: Soy, Almond, Hazelnut, 

Coconut, Rice 


Originally, Alpro aimed to create a more environmentally friendly type of ‘milk’ 

directly based on soy. There are currently 3 soya flavours- chocolate, 

strawberry and vanilla, as well as an almond dark chocolate drink launched in 

2013. In March 2016 Alpro launched two on-the-go offerings- Fusion Soya 

Apple-Kiwi and Fusion Coconut pineapple lemongrass. 

Alpro have succeeded commercially with sales growth of 70% since 2012. 

Much of this growth is down to innovations such as nut milks, and NPD within 

their line of dairy free yoghurts and desserts. In 2014 they were listed in The 

Grocer’s list of Britain’s 100 Biggest Grocery Brands at number 100. 

Alpro is a company also known for its sustainability. They were able to reduce 

their carbon footprint by 50% between 2008 and 2013 thanks to increased 

energy efficiency in their factories. 

In recent years, alternative drinks have become increasingly popular with a 

variety of flavour variants. Alpro has kept up with these new trends and 

launched their competing flavour variants i.e. hazelnut, coconut and cashew, 

moving away from soya and becoming more about the goodness of ‘plant 

power’. Alpro rebranded their logo and packaging to remove references to 

soya, replacing it with the strapline “enjoy plant power” to reposition the brand 

as a plant based dairy-free brand with an abundance of flavours. 

92 



1980 

Launch of 

dairyalternative. 

brand, Alpro 

Jan 2012 

Overhaul of 

Alpro logo. 

‘Soya’ replaced 

with ‘enjoy 

plant power’ 

Jan 2012 

Launch of 

almond and 

hazelnut milks. 

to achieve new 

Sept 2012 

Launch of UHT 

rice drink to 

help brand 

transition to a 

‘plant-based’ 

brand. 



Apr 2014 

Launch of 

coconut milk. 

Nov 2015 

Coconut 

almond milk to 

increase 

variety, and 

keep up with 

coconut milk 

trends. 

Mar 2016 

‘Fusion’ range 

launched in onthe-go 

format. 

Exotic flavours 

Figure 6.27: Evolution of Alpro alternative milks, product and packaging 

• Key consumer groups for Alpro are those looking to manage their weight 

with lower calorie alternatives to cow’s milk, those looking to avoid lactose 

for digestive issues, and individuals concerned about the environmental or 

animal welfare implications of dairy farming as well as general health aware 

consumers wanting to try something new. 

• Alpro’s repositioning from a soya milk brand to a general dairy alternative 

brand has helped them appeal to a wider range of consumers with their 

other products in their range. They were able to capitalise on growing 

consumer awareness of almonds and coconuts as superfoods and this has 

certainly helped them grow. 

• With their clean, neutral packaging they are conferring a naturally healthy 

product and are appealing to a broad range of consumers. 

93 



Jan 2010 

Alpro launched TV 

& press 

advertising 

campaign 

targeting older 

woman. Strapline- 

‘recommended by 

kids for active 

adults’. 

Apr 2011 

Alpro launches 

its presence 

across the foodservice 

sector, 

becoming the 

sponsor of the 

UK’s first ever 

Coffee Week. 

Jun 2012 

Alpro collaborates 

with Uma Healy 

from the band ‘the 

Saturdays’, to 

promote the ‘power 

of plant-based 

eating’ through PR, 

print, online & radio 

campaign. 



Jan 2013 

Blogger campaign 

focussing on 

people who eat 

lunch at their desk 

to consume 

healthy Alpro 

products. 

‘Deskfests’. 

2015 

TV ad highlights 

healthy qualities of 

Alpro, aimed at 

young woman. 

Almond drink brand 

collaborated with 

London Fashion 

Week. 

Figure 6.28: Alpro advertising campaigns 2010-15 

• Alpro’s advertising is skewed towards females with a broad age spread as 

this is their primary audience. The recent collaboration with London 

Fashion Week and Women’s Health in particular has focused on appealing 

to younger women conscious of their health and appearance. Through this 

they have aligned the brand with healthiness and beauty, in line with their 

core health and wellbeing message. 

• Alpro focus on TV advertising campaigns, blogger campaigns, social media 

and print advertising to promote the goodness of their products. 

94 



6.6.3 Alternative milk case study: Blue Diamond 

Turnover 2014: £75 million 

Number of people in the cooperative: 

3,000 To view + please 

Company age: 105 

Target consumers: Vegans, weight 

conscious, health aware 

Most popular product: Almond milk 

Profit growth: 37% 


This almond-based company grows its raw material in California, where it is 

based. In the UK, the Blue Diamond stockists are Tesco, Sainsbury’s, Asda, 

Morrisons, Waitrose and Ocado. 

• Blue Diamond offered the UK’s first reduced sugar almond milk drink, 

further improving their health credentials and appealing to health aware 

consumers. In the UK they launched a vanilla flavoured product, though 

this is their only flavoured product in the main retailers. 

• The Almond Breeze range launched in 2012 with three flavour variants. The 

packaging is clear and clean and stands out on-shelf. The vibrant 

American-style colours differentiate the range well and the focus of the 

‘pouring’ image appeals to UK consumers. The brand and the packaging 

has remained unchanged since its launch in the UK. 

95 



2012 

Launch of US giant Blue 

Diamond Almond Breeze, 

offering in original, 

unsweetened and chocolate 

flavours. 



Launch of 

Vanilla Blue 

Diamond 

Almond Milk. 

Figure 6.29: Blue Diamond evolution of products and packaging. 

2014 

Launch of Almond Breeze 

reduced sugar products. 

• Blue Diamond focused their original marketing push on a TV advertising 

campaign that aired during a Coronation Street break. The campaign 

highlights the health credentials of Blue Diamond Almond Breeze with the 

strapline “Goodness is now gorgeous”. 

• The TV advertising in 2014 also focused solely on the low calorie content 

of their products, attempting to appeal to a mainstream consumer 

audience of weight conscious consumers. 

2012 

UK launch of Blue 

Diamond Almond Milk. 



Feb 2013 

TV advert on ITV1 as part of 

£3m advertising campaign. 

Highlighted health benefits of 

almond milk. 

Dec 2014 

Ad focusing on calorie content 

& fat content in Blue Diamond 

and skimmed milk. Strapline- 

‘Goodness is now gorgeous’. 

Figure 6.30: Blue Diamond Almond Breeze advertising campaigns 2012-14 

96 



6.7 Summary 

• Categories are transitioning towards the low-sugar or high-protein trend. 

• Coffee, confectionery and traditional flavoured milk are blurring the 

‘functional drink’ category line with added-protein. 

• Products are becoming more tailored to the customers’ needs. 

• Private-label competition is strong for traditional flavoured milk and coffee 

categories. 



• Brands have more non own label market space in the alternative, 

confectionery, functional and breakfast categories. 

• Retailers have created competitive variations in the traditional and coffee 

flavour categories. 

97 



7. MERCHANDISING AND PRICING 

Currently, flavoured milk can be found in several locations in UK supermarkets: 

• The Chilled Dairy Aisle: Traditional flavoured milk drinks, functional 

dairy drinks, confectionery drinks, coffee drinks and some dairy alternatives 

are often placed above white milk. 

• The Cereal Aisle: Breakfast drinks are placed in the the on-the-go 

breakfast cereals section in the cereals aisle, near the on-the-go alternatives 

(i.e. pots of porridge). These are UHT shelf-stable products. 

• Lunch Meal Deals: Flavoured milk is placed next to the lunch deals 

section at the front of the store. Coffee flavoured milk is the most popular 

alternative in this aisle. 

• Promotional Areas: Flavoured milk, particularly coffee and traditional 

flavoured milk is placed in the promotions sections of supermarkets on aisle 

or gondola end. These can be themed around convenience (e.g. lunch deals) 

and occasion usage (breakfast options). 

• Specialised Dairy Fixture: Flavoured milk can, in some circumstances, 

also be placed in the dairy aisle near yoghurt, another dairy derivative preferred 

for high-protein content. In Tesco this is the ‘Active Health Fixture’. 

• Health & Beauty: In some instances, sports nutrition and slimming 

drinks can be placed next to energy drinks in the ambient health & beauty 

section of the store. 

• Ambient Drinks: It is also possible for some drinks, particularly sports 

nutrition drinks, to be placed alongside energy drinks in the ambient section. 

• Ambient UHT Aisle: UHT dairy alternatives are often placed in their 

own section in the ambient aisles, typically in the tea & coffee aisle. Some 

ambient flavoured dairy milk can also be found in this aisle. 

• Ethnic Foods: Nurishment Original cans can often be found in the 

ambient aisles alongside ethnic foods. 

The following schematics show where the various retailers place their product: 

98 


7.1 Tesco 

7.1.1 Tesco chilled dairy aisle 

Own-brand 

Traditional 

To view please Coffee milk 


Traditional 

Coffee Milk 

White milk


7.1.2 Tesco chilled protein aisle 

Functional protein drinks 




Yoghurt drinks 

100 



7.1.3 Tesco ambient cereal aisle 

Breakfast drinks 



Oat based cereal products 

101 



7.1.4 Tesco: traditional flavoured milk pricing 2016 



102 



7.1.5 Tesco coffee and breakfast milk pricing 2016 



103 



7.1.6 Tesco functional and protein flavoured milk pricing 2016 



104 



7.1.7 Tesco confectionery and alternative flavoured milk pricing 2016 



105 



7.2 Sainsbury’s 

7.2.1 chilled dairy aisle 

Alternative 

Traditional 

Own-brand 

Protein Coffee milk Traditional 

White To view milk please 


106 



7.2.2 Sainsbury’s cereal aisle 

Oat based breakfast products 

Breakfast milks 




107 



7.2.3: Sainsbury’s ambient functional drink 

aisle 




Other energy drinks 

108 



7.2.4 Sainsbury’s ambient milk aisle 

Traditional 

Alternative 

Alternative 

Alternative 



Alternative 

Long life milk 

Alternative 

Alternative 

109 



7.2.5 Sainsbury’s traditional flavoured milk prices 2016 



110 



7.2.6 Sainsbury’s coffee and breakfast flavoured milk prices 2016 



111 



7.2.7 Sainsbury’s functional/protein flavoured milk prices 2016 



112 



7.2.8 Sainsbury’s confectionery and alternative flavoured milk prices 2016 



113 



7.3 ASDA 

7.3.1 ASDA chilled dairy aisle 

Lactosefree 

Coffee milk 

Alternative 

Own-brand 

Traditional 

White milk 



114 



7.3.2 ASDA cereal aisle 






115 



7.3.3 ASDA ambient dairy & alternative 

aisle 

Traditional 

Long-life milk 


purchase Alternative full report 

Alternative 


Lactosefree 


116 



7.3.4 ASDA traditional flavoured milk prices 2016 



117 



7.3.5 ASDA coffee and breakfast flavoured milk prices 2016 



118 



7.3.6 ASDA functional /protein flavoured milk prices 2016 



119 



7.3.7 ASDA confectionery and alternative flavoured milk prices 2016 



120 



7.4 Morrisons 

7.4.1 Morrisons chilled dairy aisle 

Coffee milk 

Yoghurts 

Goat’s milk 

White milk 

Lactose-free 



Alternative 

Alternative 

121 



7.4.2 Morrisons ambient milk aisle 

Flavoured milk powder 

Milk flavouring 



Traditional 

Long life milk 

122 



7.4.3 Morrisons traditional flavoured milk prices 2016 



123 



7.4.4 Morrisons coffee and breakfast flavoured milk prices 2016 



124 



7.4.5 Morrisons functional/ protein flavoured milk prices 2016 



125 



7.4.6 Morrisons confectionery and alternative flavoured milk prices 2016 



126 



7.5 Waitrose 

7.5.1 Waitrose chilled dairy aisle 

Traditional 

Coffee milk 


Lactosefree 

Alternative purchase full report 

White milk 

White milk 

127 



7.5.2 Waitrose cereal aisle 

Oat based 

products 





128 



7.5.3 Waitrose ambient milk aisle 

Alternative 

Own brand 

alternative 

Alternative (rice & oat) 

Own brand 

Alternative 

alternative 

Own brand 

alternative 

Alternative (Almond) 


Alternative purchase (Soya) full report 



Lactosefree 

129 



7.5.4 Waitrose traditional flavoured milk prices 2016 



130 



7.5.5 Waitrose coffee and breakfast flavoured milk prices 2016 



131 



7.5.6 Waitrose functional/ protein flavoured milk prices 2016 



132 



7.5.6 Waitrose confectionery and alternative flavoured milk prices 2016 



133 



7.6 The Co-operative 

7.6.1 The Co-operative chilled dairy aisle 

Traditional/ confectionery 

Own brand 

Alternative 



White milk 

134 



7.6.2 The Co-operative chilled on-the-go drinks 

Functional flavoured milk 

On-the-go drinks 



135 


8. THE FUTURE OF THE FLAVOURED MILK MARKET 

There are various political, technological, social and environmental factors set to impact 

the future flavoured milk market, on both a global, European and UK level. These are all 

issues which the flavoured milk industry must be aware of and respond to, in order to 

achieve market growth. Each of these factors are explained in greater detail in the coming 

pages. 

POLITICAL 

Global 

End of China’s one 

child policy 

Europe 

Removal of EU 

milk quotas 

UK 

Brexit 

Sugar Tax 

ENVIRONMENTAL 

Europe 

Potential tax on carbon 

emissions from animal 

derived products 

To UK view Flavoured please 

purchase Milk Market full report 

TECHNOLOGICAL 

Europe 

Innovative natural sweeteners 

UK 

Lack of UK co-packers and 

bottling plants 

SOCIAL 

UK 

Consumer support 

for UK farmers 

Ageing population 

Hectic lifestyles 

Desire for plantbased 

milk 

alternatives. 

Figure 8.1: Political, environmental, social and technological factors influencing the flavoured milk 

market.


Political factors 

• Removal of EU milk quotas is in part responsible for low dairy prices, which have 

fell 30% between 2013 and 2015 (BBC July 2016), as global milk production overtook 

demand. This has a significant impact on the flavoured milk market as flavoured 

milk becomes an attractive opportunity to add value back onto dairy products. 

• The abolition of the Chinese one child policy is likely to have an impact on the 

global flavoured milk market. An impending rise in infant population in China could 

represent a significant opportunity for the flavoured milk market. 

• Other domestic political factors that could affect the flavoured milk market are the 

UK’s exit from the European Union, and the implementation of a ‘sugar tax’ on 

high-sugar drinks (excluding milk-based drinks) in 2018. 

Technological factors 

• Alternative sweeteners, such as stevia and coconut palm sugar, signify an 

important development for the flavoured milk market. 

• Bottling facilities available in the UK has a substantial impact on the market. 

Currently there is a lack of contract manufacturers able to produce flavoured milk 

in UHT plastic bottles, with the majority of UHT products being produced in 

continental Europe. 

Social factors 

• Growing support for British farmers has already impacted consumer purchase 

patterns within the white milk market, with Morrisons ‘Milk for Farmers’ brand 

performing well. 

• An ageing population in the UK is an important factor to be considered by food and 

drink brands, as consumer needs and preferences change. 

• Increasingly hectic lifestyles and a growing interest in plant-based diets are 

both factors which have already impacted the food and drink market, with on-thego 

propositions and dairy alternatives both seeing good growth. 

Environmental considerations 

• A tax on carbon emissions associated with animal derived products is another 

factor likely to have an impact on the flavoured milk market. 

• Growing awareness of environmental impacts of cattle production, through films 

like ‘Cowspiracy’, may increase sales of plant-based milk alternative 

137 



8.1 Political: UK ‘Sugar Tax’ 

Of all the future challenges, sugar is a very significant issue that the flavoured milk industry 

will have to deal with over the next decade. 

Sugar is an integral part of the flavoured milk product, which is ordinarily comprised of 

milk, sugar and flavourings. However, high-profile celebrity endorsed campaigns and 

government led initiatives are beginning to turn the tide on sugar. A 2015 report published 

by Public Health UK entitled ‘Sugar reduction: from evidence into action’ calling for a tax 

on high sugar foods sparked opposition within the food and drink industry, who cited a lack 

of evidence that the tax would be effective. 

Cost of 

obesity 

Obesity-related health issues are costing the NHS 

approximately £5.1 billion each year. (NICE 2013) 

Prevalence of 

obesity 

International 

evidence 

In 2015, 25% of adults, 10% of 4 to 5 year olds and 

19% of 10 to 11 year olds were obese. (HSCIC 2015) 



A sugary drink tax in Mexico led to a 12% increase in 

sales of sugar-free drinks after one year. (Colchero 

2016) 

Opinion of 

NHS 

Figure 8.2: The case for the UK sugar tax 

Head of NHS England says that a sugar tax of 10% to 

20% could be effective in saving lives. 

-free drinks after one year (BMJ 2016) 

In March 2016, the then Chancellor George Osbourne announced a tax on soft drinks, 

which will come into force in 2018. Figure 8.3 details how this drinks tax will work. Milkbased 

drinks are exempt from the tax, meaning at present there is no direct impact upon 

the flavoured milk industry. However, the tax illustrates a general trend towards low-sugar 

drinks, which may affect consumer sales, and flavoured milk manufacturers may want to 

voluntarily respond to these signals. 

138 



How will the sugar tax work? 

• Companies will be taxed on the sugary drinks they manufacture 



• There are two tax brackets, depending on the drinks sugar level. 

• Drinks containing sugar above 5g/ 100ml will be levied at 18p/l 

• Drinks containing sugar above 8g/ 100ml will be levied at 24p/l 

Fruit juice and milk-based drinks are exempt from the tax 

Figure 8.3: How the 2018 sugar tax will be implemented (BBC 2016) 

8.2 A short history of sugar and flavoured milk (1933-2016) 



Figure 8.4: History of flavoured milk & sugar 

The questioning of the role of sugar can be traced back to John Yudkin’s seminal 1972 

book, “Pure, Whole and Deadly.” This led to the introduction of artificial sweeteners such 

aspartame in 1982 and saccharine in 1995, billed as the healthier alternative to sugar. More 

recently this has been questioned, with unsubstantiated reports that these substances 

cause multiple health problems including cancer. 

The food industry is increasingly looking into the use of natural sweeteners including stevia 

syrup, derived from a shrub indigenous to America, which was approved for use in Europe 

in 2011. 

139 



Despite the availability of artificial and natural sweeteners, the flavoured milk industry has 

been slow to embrace the lower sugar theme. There is evidence that the tide is now turning, 

with certain brands, notably Frijj, developing reduced sugar versions of their most popular 

offerings. 

8.3 The sugar debate in the UK 

Why is the sugar debate so lively now? 

• In October 2015, Public Health UK published the report Sugar Reduction: 

The evidence for action. 

• 25% of adults, 10% of 4 to 5 years olds and 19% of 10 to 11 year olds in 

England are obese. 

• March 2016, the Chancellor announces “Sugar Tax” to be implemented in 

2018. 

How is the 

debate 

happening? 

• Through social 

media 

• At food and 

drink industry 

events 

• In parliament 

• Academic 



What is it about? 

• The UK 

population is 

eating too much 

sugar. 

• It is a public 

health issue 

costing the 

NHS £5.1bn 

annually. 

through related 

Where is it 

happening? 

Globally, specifically: 

• United States 

• European Union 

• United Kingdom 

Figure 8.4: Understanding the 2016 sugar debate in the UK 

Who does it 

affect? 

• The UK 

population 

• The UK 

Government 

• The Food and 

Drink Industry 

• Charities 

When did it begin? 

Over the past 30-40 years, food, including sugar: 

• Has become more readily available, more convenient and more 

processed 

• Is subject to more marketing and advertising. 

• In real terms, it is much cheaper. Sugar is no longer a luxury. 

140 



8.4 Current UK Sugar Consumption 



Figure 8.5: Understanding the difference between intrinsic and extrinsic sugars 

Most of the debate focuses on the effects of ‘non-milk extrinsic sugars’ (NMES), with some 

analysts making a distinction between ‘good’ sugars and ‘bad’ sugars in the same way that 

‘good’ and ‘bad’ fats are described. 

8.4.1 Historic per capita consumption of NMES in the UK (1704-2012) 



Figure 8.6: Historic annual per capita consumption of NMES sugars in the UK (kg) – 

1704 to 2012 

Since the Victorian era, annual per capita consumption of NMES sugars in the UK has been 

rising, reaching a peak in the 1970s. Since 1996, efforts in product reformulation have led 

to a decrease of annual per capita consumption of NMES. 

However, annual per capita consumption of NMES continues to be higher than the 

recommended daily average for most UK adults and children. 

141 



8.4.2 Non-milk extrinsic sugars (NMES) by gender and age group 



Figure 8.7: Non-milk extrinsic sugar annual per capita consumption (kgs), National Diet and 

Nutrition Survey (2014) 

8.4.3 Sources of NMES by age group 

Figure 8.8: Children aged 1.5- 3 Figure 8.9: Children aged 1.5- 3 

years 



Figure 8.10: Teenagers aged 11-18 

years 

Figure 8.11: Adults aged 19-64 years 

142 





Figure 8.12: Adults aged 65+ 

• Teenagers (11 to 18 years of age) where found to consume most sugar. Adults over 65 

were found to consume the least sugar. Males consumed more sugar per capita across 

all age groups. 

• Infants, children and teenagers consume most of their sugar in soft drinks, followed by 

sugar, sweets and jam. Adults in both age categories consumed most of their sugar in 

sugar, sweets & jams, followed by soft drinks. 

• Children between the ages of 1 to 3 consume the most dairy derived sugar, with 19% 

of their sugar consumption coming from milk 

• Children between the ages of 4 to 10 derive 14% of their sugar intake from dairy 

sources. 

• Adults derive least amount of sugar from dairy sources, with only 8% of NMES coming 

from milk products. 

8.5 Comparative sugar content of sweetened drinks 

There is a wide variation of sugar levels within flavoured milk. Whilst carbonated drinks 

contain the highest levels of sugar, flavoured milks are not far behind, making them targets 

for sugar campaigners. 

143 





Figure 8.13: comparative sugar content of sweetened drinks 

144 



8.5.1 Flavoured milk sugar content 

Below we have profiled the sugar content for flavoured milk bestsellers per bottle, which is 

usually consumed in one sitting. Items are organized into Power Categories, with items on 

the left containing the highest amounts of sugar. 



Figure 8.14: The sugar content of flavoured milk 

Maxi Milk Extreme has the least sugar per bottle, perhaps reflecting the health conscious 

nature of functional drink consumers. It also contains the least sugar per 100ml, at 1.2 tsp/ 

100ml, closely followed by Frijj Reduced Sugar at 1.4tsp/100ml. Fuel 10k contained the 

most sugar per 100ml with 3.3 tsp. closely followed by Dunn’s River Nurishment at 3.1tsp/ 

100ml. 

145 



8.6 Public health policies 

Government and health bodies in the UK are looking at a variety of statutory and voluntary 

interventions, all of which could impact on the flavoured milk market. 

8.6.1 Suggested actions on sugar 



Figure 8.15: Suggested actions on sugar, Public Health UK 

146 



8.7 Arguments for and against the ‘sugar tax’ 



curb 

Figure 8.16: Arguments for and against the sugar tax 

147 



8.8 Evaluating the sugar tax 

The introduction of a food tax can change the consumer’s behaviour. As the rise in product 

price predicts a fall in demand. Even if the change in behaviour is small, it is significant in 

terms of health. There have been, however, multiple responses to the introduction of sugar 

levies in different parts of the world. 



Figure 8.17: Sugar tax experiences from other countries 

148 



8.9 Will the sugar-tax affect flavoured milk? 

In a nutshell, no. The upcoming sugar tax is designed to increase prices on soft drinks, but 

excludes fruit juices and milk-based products. 

Tam Fry of the National Health Obesity forum provides a helpful clarification. Speaking in 

January 2016 he said: 

“We are talking about a tax on sugary drinks which are without nutrition 



and injurious. It would be wrong to tax sugar in foodstuffs as that would 

hit the poor hardest”. 

However, this is not to say that the tax will affect the flavoured milk market. On the one 

hand, it may be favourable for the industry, as consumers substitute sugar laden soft drinks 

with cheaper, milk-based alternative. 

The 2018 sugar tax could represent a larger market signal, with a general consumer trend 

towards healthy eating and weight consciousness. There could be opportunities for the 

flavoured milk industry to tap into this trend by developing lower sugar products. 

8.9.1 Alternative sweeteners 



Figure 8.18: Comparison of non-sugar based sweeteners that could be utilised by the 

flavoured milk industry. 

149 



8.9.2 How can flavoured milk brands move towards reduced-sugar? 



Figure 8.19: Strategies for flavoured milk brands to reduce sugar usage 

The sugar tax has been met with controversy within the food and drink industry, with claims 

it creates unfair competition as other unhealthy foods are not taxed. However, there are 

untapped opportunities within the flavoured milk sector to create products for health 

conscious consumers who like the flavours and dairy goodness but without the adverse 

effects of sugar. By using non-sugar sweeteners discussed in figure 8.18, and by tailoring 

products to health conscious consumers such as gym-goers and parents, manufacturers 

could open up entirely new markets. 

150 



8.9.3 Case study: Frijj Reduced Sugar 

In February 2015, a sugar-reduced version of the UK’s most popular 

milkshake was launched. 

The product contains 40% less sugar and is offered in the brand’s bestselling 

flavours: Choc-o-chocolate and Seriously Strawberry. 

Reformulation achieved a lower sugar version that doesn’t compromise on 

taste by incorporating the sweeteners Acesulfame K and Sucralose. 



Figure 8.20: Frijj Reduced Sugar 

8.10 The removal of EU milk quotas 

On 1 st April 2015, the long-standing EU milk quota system was lifted. In the long-term, 

predictions were made about redistribution of milk products in the UK, though no major 

changes were predicted for EU milk production. 

151 





Figure 8.21: EU 28 milk production in million litres, 2012-2015 (Dairy Co) 

Total increase in production was forecasted at 1% for 2015/16. Since the quotas were 

removed, production levels have been higher than forecasted (see figure 8.21). 

Subsequently, milk prices have declined, reaching levels not observed since 2009 due to 

oversupply. 

EU production has generally been increasing year-on-year. This, combined with several 

factors that include the 2014 Russian embargo on agricultural imports and subdued 

demand from China, has led to a decline in global demand and thus, on incomes for EU 

farmers. 

As the global population and incomes continues to grow, and demand for dairy rises, the 

long-term prospects for dairy production remains positive. As seen in figure 8.22, EU 

exports of dairy products are generally increasing. This is despite the Russian embargo in 

2014 which restricted exports and in doing so helped the EU establish and grow trade 

relationships with other countries. 

152 





Figure 8.22: EU total dairy exports in tonnes (AHDB 2015) 

8.10.1 Implications for flavoured milk market 

According to the EU Commission, low milk prices are expected to improve in 2016, with 

the strengthening of the EU economy and a rise in internal demand. 

Flavoured milk is the ideal outlet for surplus milk as it is a high value product and global 

demand is increasing, particularly in developing countries where milk imports are expected 

to grow. Flavoured milk producers should therefore focus on developing products targeted 

at these fast-growing economies where EU trade relationships are strong. 

8.11 Abolition of China’s one-child policy 

In October 2015, the Chinese government announced to abolition of their longstanding 

one-child policy, now allowing families to have 2 children if they wish. Initially China’s birth 

rate is expected to rise but not dramatically peak, as Chinese women have become more 

career-oriented. 

However, China will still remain the world’s largest flavoured milk consumer and therefore 

will continue to be crucial to the development of the global category. 

153 



For the UK flavoured milk market, this represents a key opportunity for export. This is 

especially true lactose-free milk products that fit with China’s high prevalence of lactose 

intolerance. 

8.12 Environmental concerns: tax on carbon emissions 



Figure 8.23: UK emissions from agriculture, forestry and fishing (ONS) 

According to the National Office of Statistics, total UK greenhouse gas (GHG) emissions 

have been decreasing year-on-year. However, emissions for the agricultural sector present 

a slightly more static pattern accounting for approximately 10% of the UK’s total GHG 

emissions (see figure 8.23). Cows are responsible for a large proportion of agriculture’s 

methane emissions through rumination, digestion and slurry management. It has been 

estimated that a typical dairy cow emits 117kg of methane annually, equivalent to driving 

12,000km in a petrol car (Houses of Parliament Postnote 2014). 

154 



Agricultural GHG emissions do not account for transport or other associated emissions. 

That is, the agricultural sector emissions figure does not reflect its true GHG emissions and 

is estimated to be higher than shown. 

With the Climate Change Act 2008 committing to at 

least an 80% cut in UK GHG emissions by 2050 

compared to a 1990 baseline, it is important for the 

agricultural industry to address GHG emissions. 

While there is a voluntary initiative for the industry, 

the ‘greenhouse gas action plan’, there has been talk 

of a carbon tax for agriculture. Similar carbon taxes 

exist countries including Canada and Australia, but 

have not included the agricultural sector due to 

logistical and financial constraints. 

Although an emissions tax is not an imminent topic 

in agriculture it is something both farmers and dairyproduce 

manufacturers should be aware of. 

8.13 UK exit from the European Union 

Following a closely fought referendum in June 2016, the UK opted to leave the European 

Union. At the time of writing, the conditions of exit have not been set out, and could take 

several years to negotiate new trade agreements. At present it is difficult to fairly weigh up 

how these political developments will affect the UK’s flavoured milk industry, however there 

are some predictions that can be drawn out. 

According to the Food and Drink Federation, 73% of the UK’s agri-food exports are to other 

EU states. For dairy products in particular, trade with the EU is of upmost importance. In 

2015, 90% of UK dairy exports went to other EU states, with 99.4% of dairy imports coming 

from the EU. 

155 



Brexit: negative effects 

Membership to the EU meant free 

movement of goods between member 

states, and the elimination of tariffs and 

border controls. The UK will now need to 

renegotiate trading deals, and it is 

uncertainty as to how this will work. 

UK farmers will no longer be supported 

by the Common Agricultural Policy. Defra 

figures show 55% of UK farming income 

came from CAP payments, helping 

through periods of market volatility. 

Relaxing high EU food standards to lower 

production costs will be difficult as 

exports to the EU will still need to meet 

these standards. 

Brexit: positive effects 

British companies will no longer be 

subject to EU environmental or 

labour regulations, making the UK 

more competitive on the global level. 

The UK will be able to decide upon 

its own regulations. 

Switzerland and Norway’s versions 

of the CAP provide more support for 

farmers than the EU CAP does. The 

UK could now perhaps offer even 

better support to farmers. 

The UK paid in more money than it 

directly received from the EU. In 

2014 it contributed a net of £9.8bn, 

around 1.5% of total UK public 

expenditure. 

States in the EEA must comply with EU 

safety legislation to have the right to 

trade with the EU. Despite not being a 

member, Norway still contributes £106 

per person to the EU, compared to £153 

by the UK. 



If the UK were to contribute to the 

EU budget in a similar way to 

Norway, HM Treasury estimates UK 

contribution would fall by 30%. 

EU trade agreements with the rest of the 

world increase the UK’s market access. 

This has certainly been influential in 

increasing the UK’s agri-food exports to 

international countries. 

Leaving the EU could result in a 

devaluation of Sterling for a 

sustained period. This would be 

overall good for UK food and drink 

exports (though not imports). 

Leaving the EU and being in the EEA may 

mean having to abide by many of the 

same rules and having to pay 

contributions without the power to shape 

them. 

156 



At present, uncertainty is the key word used by many dairy producers and manufacturers, 

however many companies are promising business as usual. 

• Arla, the largest farmer owned dairy cooperative in Europe, announced it is committed 

to business in the UK, but that free movement of milk across European states is key to 

its success. 

• Danone announced similar commitment, stating it will continue to monitor the situation. 

• Others such as the NFU are treating Brexit with caution, calling on the UK government 

to make new trade arrangements as a matter of urgency. 

Key issues specifically affecting the flavoured milk industry 

• Trade negotiation with the EU; 

• Removal of CAP could cause crisis in farming, potentially increasing milk prices as 

more farmers go out of business; 

• Changes in food safety legislation; 

• Reliance on EU bottling and co-packing facilities; 

• Loss of EU research funds. 

8.14 Social: supporting British farmers 

In recent years, the practice of using milk as a loss leading product 

has had a significant impact on farmers’ profitability. One in 10 dairy 

farmers have gone out of business between 2013 and 2016 (AHDB 

2016). This has led to consumer concern for farmers’ welfare and 

major retailers are beginning to respond to this. This has been 

mostly clearly exemplified by Morrisons’ ‘Milk for Farmers’ brand, 

which allows customers to voluntarily pay a premium to pass back 

to dairy farmers. This sparked controversy among British 

consumers, as it emerged that this premium is actually shared 

among Arla’s continental farmers rather than solely UK farmers as 

the packaging implies. 

157 



This desire to support UK dairy farmers is closely linked to the growing trend for buying 

locally produced products. The driving factors behind local sourcing are often 

environmental and ethical considerations. These include a desire for sustainable sourcing, 

reduced carbon emissions, supporting local communities, shorter supply chains with 

greater integrity and higher animal welfare standards. 

There is an opportunity for flavoured milk brands to capitalise on their 

British milk provenance. Daioni, with its Welsh organic milk, is a brand 

which does this effectively and is able to charge a premium for their 

provenance positioning. However, this opportunity is limited mainly to 

fresh products due to the lack of UK contract manufacturing capability 

for UHT milk bottled drinks. 

In November 2015, Ash Amirahmadi, vice president of milk and member services at Arla 

UK, claimed that the brand is set to return £5m back to farmers within its first year of sales. 

By February 2016, Morrisons claimed that the brand was surpassing its target sales. This 

demonstrates a clear willingness from consumers to voluntarily pay more for ethical 

reasons. There is little reason this could not also apply to flavoured milk. However, if milk 

prices start to rise again this model may prove redundant. Furthermore, it has faced 

criticism from some saying it is the retailers and processors responsibility to ensure their 

farmers are paid fairly. 

8.15 Social: ageing population 

With healthcare advances and consequent improvements in mortality rates, the UK 

population is ageing and is expected to continue to do so. Currently, one in every six adults 

in the UK is 65 or over, which is expected to rise one in four by 2050. 

158 



Maintains 

muscle 

mass 

Rich in 

vitamins Broader D 

consumer & K, and 

calcium base 

High 

Targeted 

protein 

packaging 

content 

Benefits of 

To view milk please to 

purchase older full report 

people 

Prevents 

heart 

disease 

Prevents 

Functional 

cognitive 

decline 

drinks 

Bone and 

Rapid 

joint 

growth 

health 

Figure 8.25: Health claims made around the benefit of milk to people aged 65 & over. 

• There is a perception that milk is a beneficial for the elderly population. This provides 

clear opportunities within the flavoured milk industry to target specific requirement of 

people aged 65+. 

• It is claimed that milk can maintain muscle mass, prevent cardiovascular disease 

and cognitive decline, and maintain bone and joint health in elderly people. 

• Elderly consumers have specific needs for vitamin D, vitamin K and calcium. Omega- 

3 is of particular importance to older consumers as it can be protective against heart 

disease and can help prevent cognitive decline. Fortification of products with these 

nutrients could therefore help flavoured milk brands appeal to older consumers. 

Ingredients such as chia and flax seeds could be used in formulations to satisfy these 

requirements in a natural way. 

• It is important for elderly consumers, especially those suffering an illness, to consume 

adequate levels of protein. Whey is a high quality protein containing the amino acids 

essential for humans. One particular study by Dangin et al. (2003) found whey protein 

159 



to be especially effective in preserving muscle mass in older adults. Flavoured milk 

products with whey protein would also be well suited for elderly consumers. 

• The real challenge lies in marketing to this group. Elderly consumers are often set in 

dietary habits, so it may prove difficult to persuade this demographic group to, for 

example, consume milkshakes instead of snacking. The key is to fit the product around 

existing habits and offer a feasible alternative to something they already use. 

• For elderly consumers with limited mobility, buying large volumes of flavoured milk is 

unlikely to be practical. Furthermore, on-the-go propositions are also unlikely to be 

appealing to these consumers. Finding a format suited to these consumers is therefore 

also a major challenge for product developers. 

• In order to appeal to these consumers, it is important to make specific health claims. 

For example, rather than just claiming ‘added Vitamin D’, claims could be made about 

helping to reduce bone fractures. However, health claims must be supported by 

substantiated scientific evidence in line with EU legislation. 

8.16 Social: hectic lifestyles 

In 2015 UK employment rose to 73%, with unemployment 

rate among 18-24 year olds at its lowest since the 1970s. 

The 2015 AGCAS What Do Graduates Do? report revealed 

68% of recent graduates were in professional level jobs, a 

2% increase on the year before. This growing group of 

busy professionals represents a significant target market 

for flavoured milk producers. 

• Breakfast drinks, coffee drinks and functional drinks are particularly appealing to these 

consumers who are looking for satiating, nutritious and energising products. 

• In terms of increasing appeal to this group, sugar reduction is particularly important. 

The growing trend towards health eating and the growing media attention on the 

adverse health effects of sugar are likely to deter consumers from purchasing highsugar 

flavoured milks. 

160 



• Nutrition is important to these consumers, who do not always have time to cook 

wholesome meals and look for healthy, convenient substitutes. To maximise appeal to 

these consumers therefore it is important to make explicit health and nutrient claims on 

packaging where possible. There is also an opportunity here for innovation with 

flavoured milk products with ‘superfood’ ingredients such as coconut and flaxseeds. 

8.17 Social: desire for adult flavours 

As the flavoured milk category has matured, there has been significant development in 

terms of flavours. Using new, innovative flavours are an effective means of drawing new 

consumers into the category. This includes flavours that allude to indulgent desserts such 

as chocolate fudge cake, strawberry cheesecake and millionaire shortbread. These flavours 

reflect the innovation seen in the wider dairy category, particularly in the yogurt sector. 

Gu Hot Chocolate range 

- Flavours include salted caramel and moccha 

- Packaging sophisticated to appeal to adult audience 

Frijj Supreme range 



• Flavours include sticky toffee pudding and honeycomb 

• Premium black packaging indicates indulgence 

Supermarket own brand offerings 

• Flavours include Asda's blueberry muffin, Tesco's sticky 

toffee pudding and Sainsbury's buttersoft caramel. 

Figure 8.26: Example of adult flavour development in flavoured milk 

The purpose of this flavour innovation is to draw in older consumers to the flavoured milk 

category. Products in this range are presented in premium sophisticated packaging to 

appeal to adults as an indulgent treat. 

161 



There is clearly an opportunity for products to capitalise on the growing taste for 

‘superfood’ ingredients such as ancient grains, blueberry, pomegranate, chia seeds, and 

perhaps even vegetables such as kale and spinach. 

While major reformulation will likely require investment in terms of processing equipment, 

the returns to be made from being the first brand offering premium, healthy flavoured milks 

aimed at adults are likely to make significant returns on investment. 

8.18 Technological: development of innovative sweeteners 

One factor restraining growth of flavoured milk products is their high sugar content. High 

sugar-content is becoming an issue which is likely to deter consumers from making 

purchases. 

Generally there are two main options when it comes to reducing sugar content in flavoured 

milk: reducing lactose or using sweeteners to replace sugar. Of course, there is also a third 

option of simply reducing sugar to a point of still maintaining an acceptable taste. While 

this has worked for almond milk, it is more difficult for flavoured milk which is consumed 

on its own so needs a strong individual taste. 



Figure 8.26: Examples of sugar reduction strategies in milk drinks 

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8.18.1 Modifying/ reducing lactose 

Reducing or eliminating lactose is a relatively common way of reducing the inherent sugar 

content of milk drinks. Coca Cola’s US Fairlife product and both of Arla’s UK reducedsugar 

flavoured milk products utilise lactase enzymes to help reduce the sugar content in 

their milk. This technique is often paired with some sort of sweetening agent. 

8.18.2 Reformulating flavoured milk with sugar substitutes 

There are various artificial sweeteners including aspartame and sucralose which are widely 

used in the beverage industry. However, due to common negative associations with 

artificial sweeteners, the use of natural sweeteners is often preferred by flavoured milk 

manufacturers. 

8.18.3 Natural sweeteners 

Inulin/ chicory root fibre: Chicory root fibre is an ingredient which can help with both fat 

and sugar reduction. It is a naturally occurring ingredient that masks the bad flavours 

associated with some high-intensity sweeteners. Arla’s Flavoured Milk products use inulin 

from chicory to reduce the sugar content in their formulation by 50%. 

Stevia is a commonly used natural sweetener which is used as a replacement for sugar. 

While often associated with a liquorice-like aftertaste, recent developments have resulted 

in stevia compounds with less of the aftertaste. Stevia has been used successfully in Coca 

Cola Life as well as in Skinnygirl Protein. 

Allulose has about 70% of the sweetness of regular sugar with 10% of the calories. 

Although it has been granted GRAS (Generally Regarded as Safe) status to Tate & Lyle’s 

‘Dolcia Prima’ brand of allulose, it has not yet been approved under European Legislation. 

Monk Fruit Extract is a no-calorie sweetener which is 150-200 times sweeter than sugar. 

It is a relatively expensive ingredient and although it has been granted approval in the US, 

it has not yet by the EU. 

163 



8.18.4 Solely reducing sugar content. 

A study by Oliveira at el. (2015) tested the effects of sugar reduction on consumers’ 

enjoyment of probiotic chocolate flavoured milk. They found that although consumers 

could taste when drinks were 40% lower in sugar, their enjoyment of the drink was not 

affected significantly by sugar reduction. This suggests in some cases, a minor decrease 

in sugar content could be feasible without any need for replacement sweeteners. 

8.19 Technological: lack of UK co-packers 

Interesting and convenient formats for flavoured milk present new opportunities within the 

sector. For example, the addition of the sports cap for the Mars flavoured milk product 

made it more appealing for target consumers making a big difference to product sales. 

With many flavoured milk products positioned as convenient on-the-go drinks, storage at 

ambient temperatures is often desired, meaning UHT drinks dominate. This is particularly 

relevant for sports nutrition drinks, meal replacement shakes and breakfast drinks. The 

traditional flavoured milk category however does have a leaning towards fresh/ ESL product 

with the market leader, Frijj, predominantly ESL lines. 

UHT drinks are frequently in HDPE bottles as this resilient, re-sealable format is suited to 

on-the-go products. The longer shelf life of these products also makes exports feasible, 

allowing UK brands to take advantage of growing global demand for flavoured milk. 

However, for brands without processing capabilities in the UK, manufacturing UHT HDPE 

products is not possible due to a lack of manufacturers. While fresh milk in bottles and UHT 

milk in tetrapak are both feasible options considering the accessible facilities in the UK, this 

constraint is important to bear in mind for those considering entering the market. For brands 

wanting to produce UHT HDPE products, facilities most often used are located in Austria, 

Belgium and Germany. 

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8. 20 Considerations for flavoured milk brands looking forward 



165 



9. CONCLUSIONS & HRA PREDICTIONS 

Globally, we expect the flavoured milk market to continue to flourish as the demand for 

dairy in developing countries increases. With the abolishment of the one-child policy, China 

is a particularly attractive market for flavoured milk brands and is one which more 

international brands are likely to focus on. While the issue of the lack of UK co-packers 

persists, this is likely to hinder the potential for UK flavoured milk exports. 

Assuming that flavoured milk producers will do all they can to improve their product offering 

and marketing approach, we would expect the UK market to see strong, sustained growth 

over the next five years. In particular, we would expect stronger value growth than volume 

growth as more added value products are introduced to the category. 

Consumer Segments… 

• There is a significant opportunity globally for products which are targeted to 

specific consumer groups. Flavoured milk brands should focus on developing and 

marketing their products for adults in particular. 

• Adults consumers aged 65+ and 30-44 are both growing consumer groups which 

is currently not being targeted successfully by any flavoured milk brands in the 

UK. Although a difficult audience to target with flavoured milk, the brands which 

can do this well are likely to see success. 

• In targeting adults, it will be vital for brands to reduce sugar content and make 

clear any health benefits in order to maximise appeal to health conscious 

consumers which make up such a large proportion of the population. 

Product Formulation… 

• Innovation with vitamin/ mineral supplementation, superfood ingredients and 

sugar reduction is a growing trend expected to continue. This reformulation will 

help add appeal to adults. 

166 



• There are various options for sugar reduction including simply reducing sugar by 

a small enough quantity to maintain taste, using enzymes to remove lactose and 

substitute sugar with sweeteners. 

• A broad range of natural sweeteners is becoming available including stevia and 

inulin and these are becoming increasingly used in flavoured milk products. 

Merchandising… 

• Due to the breadth of the flavoured milk category and the various temperature 

requirements (fresh, ESL, UHT), product positioning in the grocery retailers can 

be confusing for consumers. There is often no clear destination where products 

can be found and this can lead to consumers missing products. This is particularly 

the case for sports nutrition products which can be virtually anywhere in store 

(lunch deals, chillers, health & beauty aisle, alongside energy drinks etc.). 

• Retailers are likely to continue to alter their merchandising approach until they can 

optimise the positioning of flavoured milk. 

Packaging & Positioning… 

• In terms of advertising and positioning of flavoured milk brands it is important to 

highlight the health credentials of dairy over dairy alternatives. 

• There is considerable opportunity in the sector to use packaging formats to target 

specific consumer segments. This has been done well by coffee brands and sports 

nutrition brands in particular. 

• In targeting the growing group of 65+ consumers, packaging and positioning will be 

crucial in determining success. 

• The positioning of the brand is particularly important to sports nutrition customers 

who value the credentials and status associated with some brands. 

167 



Own Label… 

• The relative infancy of the category and the brand loyalty in the sports nutrition 

segment has deterred own label from entering this category. While own label could 

be expected to eventually the enter the sports nutrition market, it will be to target the 

more mainstream consumers. 

• The infancy of the breakfast drink category has prevented own label from entering 

the category, though if growth continues this could be expected to happen within 

1-2 years. 

9.1 SWOT Analysis 



168 



9.3 Closing remarks 

The backdrop to UK flavoured milk is one of relentless change. The removal of the EU milk 

quotas, the transition to a Western-type diet by emerging economies, the UK sugar debate 

and Brexit are all aspects that create both challenges and opportunities for the UK 

flavoured milk market. 

It is also the time when many players are exploring new demographics and developing 

flavoured milk propositions for mature audiences. The UK National Office for Statistics 

shows that the 30-44 years demographic is predicted to quickly grow over the next decade. 

With flavoured milk mostly consumed by those under 45 years of age, the study of this 

segment is fundamental: functional drinks with clear benefit differentiation are key. 

With one in five adults now over 65 and the segment living longer, brands that are able to 

successfully unlock the aspirations of this segment will prosper commercially. 

Overall, we expect the UK flavoured milk market to continue to grow over the medium term, 

but not without improving its nutritional profile. The sugar debate reached new heights 

when, in October 2015, Public Health England released a document suggesting 

Government intervention in the form of a sugar tax (levy). Product reformulation has to be 

a priority, however, the UK’s flavoured milk market looks positive going into the future. 

169 



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All rights reserved, ©Teepee Ltd, t/a HRA Food & Drink: 2016 - 2017 171

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