Changing landscape for dairy explored by AHDB

Covid-19 has placed dairy ‘front and centre’ in the daily lives of UK consumers – with most products seeing an uplift in retail sales during lockdown.

With people looking for emotional support and little ‘pick-me-ups’ due to the pandemic, more and more shoppers have been turning to dairy in food and drink, leading to a significant increase in grocery spend on everything from butter to cheese.

According to the latest data, mozzarella was the biggest winner of the cheese category during lockdown – with a 48 per cent uplift in volume sales compared to last year, as more people were cooking pizza from scratch at home.

Overall, cheese has performed well with retail volumes up 16.5 per cent in the 24 weeks to September 6. During the same period, butter was up 23.6 per cent, with cream stealing the show at 31.8 per cent. However due to category size milk accounted for three quarters of the volume growth.

These findings were revealed during AHDB’s first in a series of Consumer Insight webinars which kicked off on Tuesday with a focus on dairy consumption and the changing market landscape.

AHDB Senior Consumer Insight Manager Susie Stannard said: “We all know these are unprecedented times and we have seen massive shifts in buying and consumption behaviours this year as a result of lockdown.

“We have seen dramatic changes in how we cook and feed our families. It is fair to say that Covid-19 has put dairy front and centre in the daily lives of UK households, bringing what is familiar and comforting to existing and new audiences.

“In addition, dairy is the cheapest source of protein and therefore, has performed well during a time of economic uncertainty for many households.”

During the webinar, Susie was keen to stress that despite the uplift in retail sales, the lockdown had a devastating impact on the food service sector – with the coffee market collapsing overnight as cafes and restaurants closed.

While coffee and tea drinkers took their habits home, leading to more milk being consumed indoors – resulting in an eight per cent rise in retail milk volumes, other dairy products felt the impact.

This year, 52 million out-of-home occasions for cheese sandwiches were lost with fewer people buying lunch from food service. Burgers lost 183 million occasions and despite strong growth for cheese in the pizza delivery sector, the gains were not enough to offset the losses for sandwiches and burgers.

AHDB Senior Policy Insight Manager Sarah Baker also gave an overview on how economic factors, such as Brexit, will impact the markets going forward.

She discussed the impact of lockdown on the food service and accommodation sector, the rising unemployment rate, the Chancellor’s new job support scheme and the uncertainty of leaving the EU with the end of the transition period looming.

Sarah said: “It’s difficult to see what will happen to the UK economy but we know that a trade deal is fundamental to our economy as the EU has been our main trading partner for the last 40 years.

“Leaving the EU alone would have been enough to drive us into recession but now with Covid, we are already there. Whatever happens in the weeks and months ahead, change is coming and UK businesses need to be ready and prepare for a challenging year ahead.”

This week’s Consumer Insight webinars are followed by a second set of webinars, which take place on November 10, 11, 12, and will look at some of the key industry reputational issues impacting consumer demand, such as buying British, the environment, health and animal welfare.

AHDB’s expert analysts will explore how these key issues have fared during the turbulence of 2020 and whether consumers’ views have shifted during Covid-19. The webinars will also uncover future opportunities and threats for meat, dairy and fresh produce.

To sign up for the next series of webinars, register here https://ahdb.org.uk/consumer-insight-conference-2020

 

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About The Author

John Swire - Deputy editor of Agronomist and Arable Farmer as well as responsibility for the Agronomist and Arable Farmer and Farm Business websites. After 17 years milking cows on the family farm John started writing about agriculture in 1998 and has since written for a variety of publications and has developed a wide circle of contacts within the industry. When not working John is a season ticket holder at Stoke City and also of late has become a fitness freak, listing cycling, swimming and walking as his exercises of choice.