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If Daisy the cow looked in the average convenience store fridge, she would be bemused.
While she would probably recognise what she produces ‘au naturel’ (pasteurised and homogenised, of course), there would be a variety of products she would not – and most of them with the word ‘milk’ somewhere on the label.
These days flavoured milk can be fresh or UHT. It can have flavours – or fortifiers – added. The segment includes everything from the popular sugar brands to ‘breakfast-on-the-move’ replacements – and while it will never replace carbonated drinks at the top of the national beverages popularity poll, there are some very strong players in the market.
According to recent AC
Nielsen Scan Track all drinks (Top 50 in sales value) data, various variants
of iced coffee are the must-have flavour across the country
with Farmers Union Iced Coffee the biggest flavoured milk seller (15th) nationally,
followed by Masters (19th) and Ice Break (21st) iced coffee varieties.
It’s quite different across the different states where the story becomes
really interesting, with residents in SA and WA apparently the keenest on their
dairy products.
According to the Nielsen figures, Farmers Union Iced Coffee is the top selling beverage in SA, ahead of Coca-Cola, while Masters Iced Coffee has the title in the West.
SA has two more flavoured milks in the top 10 (including a low fat coffee from and a ‘standard’ chocolate) as does WA (iced coffee and mocha).
Queensland is the next surprise, given it is perhaps our ‘hottest’ State, with icebreak Iced Coffee coming in at third and fourth (500 and 750ml packs respectively) closely following Coca-Cola.
With a performance of 23 per cent volume growth (YA), Icebreak is giving the carbonated soft drinks a shake-up and is heading to join Farmers Union and Masters as having the top selling beverage within the State. Breaka Ice Coffee comes in at 19th most popular beverage.
Dare Coffee Expresso is the top flavoured milk seller in NSW (19th), followed by Just Natural (Malt Honey Chocolate) in 37th and Oak (chocolate) in 40th.
In Victoria, Big M Chocolate is the top flavoured milk (12th outright), much higher up the order, followed by IceBreak (13th) and Big M (15th) iced coffee varieties. Milo UHT (41st) and Big M Strawberry (43rd) also show up in the Victorian Top 50 sales figures.
A big player in all these markets is National Foods with Farmers Union, Big M, Classic and Masters under its umbrella. According to Kim Mofardin, brand manager, Farmers Union, the segment is on the way up.
“ There are new competitors coming into the market with new flavours and the big players are offering new flavours too. So you get lots of brands, lots of flavours and lots of promotions, which encourages a new range of consumers to try the product on top of the core demographic (young men and women and blue-collar workers).
“So we have consumers who are more health conscious, who are looking for a healthy beverage and milk has a nutritious platform,” Ms Mofardin says.
” Some are looking for a lighter, lower-fat option, and we now have several ‘light’ variations across the ranges which are enjoying strong growth.”
Ms Mofardin says milk is seen as a beverage and a meal replacement and – with the popularity and variety of the iced coffee variants – as a ‘kick start’ to the day. Different flavours and styles will appeal to different demographics.
“ You would think it would be a seasonal drink but you have only to look at the figures for Queensland, Northern Territory and Western Australia to see that living in a hot climate does not necessarily slow the consumption.
“
It really depends on how those consumers view the product and how the brand is
positioned, whether it is seen and bought as refreshment or a meal or a kick-start,” MS
MOFARDIN SAYS.
Dairy Farmers, with brands such as Oak, Dare, Moove and Just Natural, have
recently made a move to cash in on the coffee flavour trend.
Dare is now a range of four bold coffee flavours – Espresso, Wicked Mocha Mudslide, Caramel Late and Cappuccino – and Dairy Farmers claims it’s the first brand to have a range of flavours dedicated to coffee.
“ It should come as no great surprise that coffee flavoured milk concepts have driven the growth in the category,” says Jai Sanderson, Marketing Manager – Impulse Beverages, for Dairy Farmers.
“ Consumers have become more savvy to specialty coffee with large coffee houses and smaller independent coffee retailers helping to further educate and illuminate the tastes of the coffee consumer.
“ This has had a flow-on effect in flavoured milk which can offer the sweeter, milkier coffee tastes that particularly appeal to younger audiences or those seeking a more indulgent or substantial choice versus a cup of coffee,” Ms Sanderson says.
However, while the flavoured milk segment is growing, NATIONAL FOODS’ MS MOFARDIN says it is not without competition because beverage consumption generally is growing, and there are plenty of alternatives, such as fruit juice, energy drinks, water and carbonated soft drinks. The smart retailer will think carefully about where to merchandise it.
“ To make flavoured milk work, it needs prominent shelf space. Flavoured milk can be a destination product for the core consumers, but it’s also an impulse product and it needs to be near other beverages so the customer has the choice,” Ms Mofardin says.
She suggests encouraging sales by doing some combo (meal) bundling, matching the deal to the demographic.
“ You do need to make sure the offer is highly targeted. If your store is a drop-in centre for factory workers or tradespeople, then the milk-with-pie/sausage roll deal will work well. In another area, such as the inner city or near office workers, you could choose to bundle a light/low fat flavoured milk with a sandwich or a low-fat muffin,” Ms Mofardin says.
Parmalat is the manufacturer of leading flavoured brands including Icebreak, Breaka and Rush. Market Manager, Scott McTaggart, supports Ms Mofardin’s suggestions for capitalising on the merchandising of products.
“ Retailers can capitalise on investments in promotional activities with special in=store and dual locations displays. Activities such as Icebreak’s annual Win-a-Ute promotion are conducted during peak season and it’s in the retailers’ best interests to leverage themanufacturer’s investment to drive their own sales.”
Mr McTaggart also suggests that adequate stock weights and shelf space are crucial to maximising sales.
“ Many outlets reduce product facings and stock weights of leading flavoured milk brands due to regular delivery, but this is leading to missed sales opportunities in such times as the afternoon and early morning, when the retailer is left with no stock.
“ It’s also interesting to look at how flavoured milk brands are performing in relation to other beverages. Retailers should ask themselves if the flavoured milk brands that are performing well are receiving the relative shelf space and exposure they deserve compared to those of other beverages.
“ For that reason too, it makes sense to capture new consumers by making the product readily available and highly visible by placing it with other impulse beverages.
“ Another tactic is to rotate stock in small fridges near the store’s prime impulse position, such as a counter-top fridge near the cash register.
“
The idea is to place flavoured milk in the fridge in the morning and at lunch
time – the peak consumption times – and rotate it with carbonated soft
drinks for the afternoon/evening traffic
which will maximise the sale of all impulse beverges,” Mr McTaggart says.
Looking ahead, Dairy Farmers’ Ms Sanderson says flavoured milk has traditionally played in a safe environment, but that has changed, and will change again.
“ In the last 18 months we have seen new suppliers enter the segment – and we expect more to test the waters – plus we hve seen traditional suppliers with strong regional shares expand into new States.
“ We’ve also seen a blurring orfbarriers between different segments emerge across the impulse beverage market, and because of all these changes, innovation will be the key to success and to milk’s ability to compete against other impulse beverages,” Ms Sanderson says.
“ The occasional rotational flavour or combo meal deal will no longer be enough to hold consumer interest while they are constantly exposed to new and exciting offers by other beverage segments.
“ It’s safe to say the impulse beverage dairy cooler will evolve and grow as the new age in flavoured milk unravels, Ms Sanderson says.
Already the fridge is starting to contain a dairy-based drink, while not yet rating a mention in the top 50 beverage sales figures.
It is a flavoured milk
that could be seen as a real competitor to the meal deal,
the new ‘fortified’ style of milk drinks that work not just as a beverage,
but as a real meal replacement.
One such new player is ‘Up & Go’ from health food specialist, Sanitarium
Health Food Company. In four flavours (choc ice, banana, strawberry and vanilla
ice), it’s billed as “the world’s first breakfast in a drink,
with the goodness and fibre of two Weetbix and milk’.
” It is portable, convenient nutrition, a liquid breakfast that is targetted at the consumer who occasionally skips breakfast,” says Sanitarium’s group product manager, Daniel Derrick.
“ That’s the person who values the importance of breakfast, but doesn’t have the time to sit down and eat breakfast every day. That being said, while it is targetted as a breakfast replacement because that’s when people have the biggest need, it can be used at other times.
“ Basically any time someone needs something substantial, something that has nutritional credibility, this is a meal replacement that is easy to handle, something they can consume at any time of the day and know it is good for them – and it’s not just a beverage.”
In its short history Up & Go has traditionally been sold in supermarkets but Mr Derrick says its very nature makes it an ideal product to be included in a C-Store range.
“ I understand a lot of convenience stores have a lot of trouble attracting patronage around that time of the morning – this gives them a product which will attract people to the store at that time.
“ Because it contains the goodness, fibre and protein of WeetBix and milk, Up & Go is a healthy alternative to fast food or to any other product that people use as a substitute for breakfast when they’re on the run.”
Mr Derrick says Sanitarium has point-of-sale material that can help alert customers to the supply of Up & Go in the fridge, and also does promotions to increase awareness of the product.
“ We believe there is a huge market for a product like this, because people are increasingly time-poor and they are more health conscious.
“ Recent research showed that 62 per cent of males aged 18 to 24 skip breakfast at least once a week, so if you extrapolate that figure over the general population, that means about 40 per cent miss breakfast around once a week – so the market is definitely there.
“ And this product has a very small footprint, the same size as a popper-style carton, which means it offers a good return on the amount of space required to stock it.
“ C-Store retailers can make around 70-80 cents profit per pack sold which translates to a very attractive profit per square inch of valuable fridge space,” Mr Derrick says.
Also starting to rear its head in the meal replacement sector of the flavoured milk segment is ‘Start The Day’, made by Aussie Bodies. The company also makes ‘Protein Revival’, a protein-boosted UHT milk in four flavours aimed at gym-goers or sports people for post-activity recovery.
“ There is definitely a growing market out there for ‘functional food’,” says Paul Vadasz, manager of corporate communications for Aussie Bodies.
“ The current size of the liquid breakfast category is $23.4 million and the category as a whole is growing at just over 13 per cent per year. That is predominantly grocery, but it shows the potential for P & C.
“ Now certainly there is a lot of planned purchasing there, when people are doing their grocery shopping and they grab some of our product to have it ready at home for the days they are in a rush.
“ But there is plenty of anecdotal evidence that people are buying their meals on the run. Liquid breakfasts are the ultimate form of convenient breakfast food and it makes sense for a convenience store to stock them.”
Mr Vadasz says Start The Day is the only weight-loss breakfast drink on the market. With a specific mix of protein, fat and carbohydrates in recommended nutritional amounts, it delivers sustained energy and satisfies hunger for longer.
“ It helps consumers stick to their diet and take control of their weight. The experts suggest that protein is the key to satiety – the feeling of being full - but it’s a bit hard to get protein at breakfast, especially in a convenient form. There are very few breakfast convenience foods – healthy ones at least – that give you a decent boost of protein.
“ Our research shows that one-third of all women skip one meal a day when they are dieting, with breakfast the most common meal missed. The weight loss market is huge and armed with our product, C-Stores could be grabbing those busy consumers who are on the run and looking for a healthy alternative.
“ A C-Store, particularly these days, has to be everything to everyone, or to as many people as it can be. Anyone who walks in the door should be able to find something they want, so stocking our product is not about substitution - it’s about having a broader range of offerings for a broader market of consumers,” Mr Vadasz says.