This half-year review of Euromonitor International’s Dairy Products and Alternatives data provides analysis of the biannual update to Euromonitor’s Forecast Model (FM), alongside the quarterly update to the Macro Model, offering insights into the most important developments since August 2023’s annual update. As inflation eases and milk price growth slows down, demand is slowly recovering, while plant-based categories continue to suffer from high prices.
This report comes in PPT.
The retail value of dairy products and alternatives remained relatively stable compared to the August 2023 edition. The upgrades observed in Argentina were primarily attributed to the strength of the US dollar against the local currency, while several European countries saw mitigations. These were offset by the downgrade of the Chinese market, which experienced negative unit price adjustments reflecting the declining milk prices in that market.
As butter prices have been stabilising, consumers are returning to purchasing it after switching to margarine during peak prices as a more affordable option. Consequently, the butter market size has been upgraded, following decreased unit prices. To maintain demand for margarine, producers are positioning it as a plant-based alternative to butter.
As prices for plant-based products remain high, they have become even more expensive compared to dairy products. Consequently, flexitarians have reduced their purchases of plant-based dairy, leading to downgrades in these categories. Producers are addressing this issue through rebranding efforts, such as Alpro emphasising ingredients and flavours to avoid the use of the term “alternative”.
The slowdown in dairy production in the UK, attributed to yields and a reduction in stock, has led to a downgrade of the dairy market. Additionally, prices of milk formula have been adjusted due to Aptamil’s price cuts in major retailers. Meanwhile, drinking yoghurt underwent a negative adjustment to reflect the poor performance of Actimel and Yakult in 2023 in this category.
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