Consumer Mindset Toward Dairy topics...Average Annual Growth (1995-2015): 1.5% Growth (1995-2015):...
Transcript of Consumer Mindset Toward Dairy topics...Average Annual Growth (1995-2015): 1.5% Growth (1995-2015):...
DAIRY PRODUCTS: SALES AND CONSUMPTION
February 2017
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Long-term Rise in Commercial Sales of Dairy Products,
Both Domestic and Export
100
120
140
160
180
200
220
240
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Commercial Disappearance of Milk in ALL Dairy ProductsBillion Pounds of Milk (Milkfat Equivalent Basis)
Domestic
Domestic
+ Export
Both Total and Domestic Commercial Disappearance Grew in 2016
Total: up +3.0% in 2016
Domestic: up +2.9% in 2016
Commercial disappearance includes civilian and military purchases of milk and dairy products for either domestic or domestic plus export use. It is calculated as beginning commercial stocks + production + imports –
government net removals (in years when there were removals) – commercial ending stocks. Domestic disappearance equals total commercial disappearance minus commercial exports. Disappearance is a residual figure
and therefore can be affected by any inaccuracies in estimating milk production, on-farm use, stocks, and imports.
Source: USDA ERS
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Dairy Remains a Vital Part of People’s Lives Milk Used in All Dairy Products Increasing on a Total Volume and Per Capita Basis
151
208
199
5199
6199
7199
8199
9200
02
00
1200
2200
3200
4200
5200
6200
7200
82
00
9201
0201
1201
2201
3201
4201
5201
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Domestic Commercial Disappearance of ALL Dairy Products
Billion Pounds of Milk (milkfat Equivalent Basis)
570
627
199
5
199
6
199
7
199
8
199
9
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
20
12
201
3
201
4
201
5
Per Capita Dairy Products Available for Consumption
Pounds of Milk
Average Annual Growth (1995-2015): 1.5% Growth (1995-2015): 57 lbs of dairy (milk equivalent)
Source: USDA ERSNote: 2016 Per capita numbers released in Sep 2017
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CHEESE
7,203
12,377
7,152
11,744
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
13,000
14,000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Total Cheese Commercial Disappearance up +2.7% in 2016
Domestic Cheese Up +3.4% in 2016
American’s Passion for Cheese is Evident in its Continued Growth.
Increases in Domestic and Exports.
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Cheese Commercial Disappearance (Mil LBS)
Source: USDA ERS
Domestic
Domestic
+ Export
26.7
35.1
10
15
20
25
30
35
40
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015
Per Capita Cheese Consumption (LBS)
Cheese Consumption has Increased by 8 LBS Per Person
Since 1995
Long-Term Growth in Per Capita Cheese Consumption
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Source: USDA ERS
Note: 2016 Per capita numbers released in Sep 2017
11.69 14.01
10.03
14.47
5.23
6.85
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
18.00
20.00
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015
Italian Cheeses (Primarily Mozzarella) have Surpassed
American-Style Cheeses in Sales
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Source: USDA ERS
Per Capita Cheese Consumption (LBS)
Italian VarietiesMozzarella, Other Italian
American-style CheeseCheddar, Monterey, Jack, Curd
OtherCream, Swiss, Hispanic,
Muenster, Blue, Other
Note: 2016 Per capita numbers released in Sep 2017
2.0%
3.1%
American-style Cheese Other Cheese (Italian/Specialty)
Growth in Both American-Style and
Other than American (Italian/Specialty) Cheese
Cheese Commercial Disappearance
Average Annual Growth 1995-2016
Source: USDA ERS
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U.S. Cheese Consumption High but has Room to Grow.
Cheese Consumption Low in Many Asian and African Countries.
0.2
0.7
1.3
2.9
4.4
4.9
5.7
8.4
8.4
9.3
9.5
10.4
12.6
17.4
18.3
19.4
19.6
20.1
26.7
26.9
27.1
27.6
28.4
28.4
China
Mongolia
Zimbabwe
Columbia
S Africa
Japan
Kazakhstan
Mexico
Brazil
Ukraine
Egypt
Iran
Russia
Uruguay
Turkey
New Zealand
Spain
Chile
UK
Slovakia
Croatia
Canada
Argentina
Hungary
28.4
29.5
30.4
32.8
34.4
35.1
35.5
35.9
36.6
37.3
40.1
40.3
43
44.8
45.6
47.4
47.4
48.1
50.3
53.4
54.2
57.5
57.8
58.9
59.1
Hungary
Australia
Ireland
Belgium
Bulgaria
U.S.
Poland
Estonia
Czech Republic
Israel
Netherlands
Lithuania
Norway
Latvia
Sweden
Italy
Austria
Switzerland
Luxembourg
Cyprus
Germany
Iceland
Denmark
Finland
France
2015 Per Capita Cheese Consumption (LBS)
Source: International Dairy Federation and Statistics Canada
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Cheese Growth Tied to Healthy Performance in a Number of
Areas
Domestic and exports
Natural cheese
Breakfast foods
Pizza
Convenience – shreds, snacking cheeses
Familiar giants – cheddar & mozzarella
Artisan products
Bolder flavors
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FACTORS HELPING TO GROW CHEESE SALES
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BUTTER
1184.1
1922.7
1139.6
1888.1
0
500
1,000
1,500
2,000
2,500
1995 1998 2001 2004 2007 2010 2013 2016
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Butter Commercial Disappearance (Mil LBS)
Commercial Sales of Butter are Growing
Domestic
Domestic
+ Export
Growth in Both Total (+4.5%) and Domestic (+4.7%) Commercial Disappearance for 2016
While Butter Exports were Down in 2016, the export market increased over the last 4 months (Sep-Dec)
Source: USDA ERS
4.6
5.6
0
1
2
3
4
5
6
7
8
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
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Per Person Butter Consumption (LBS)
2015 Per Capita Butter Consumption is at its Highest Point (5.6 LBS) Since 1969
Butter has Made a Comeback With Impressive Consumption
Increases
Source: USDA ERS
Note: 2016 Per capita numbers released in Sep 2017
Butter’s Growth Linked to Science, Innovation and Taste Profile
Product simplicity ties to real, natural, fresh trend
Taste/flavor that product adds to other foods
Culinary-inspired use of butter
Innovation – flavors, spreads, hand crafted, European-style
Science indicating no link between saturated fat and increased risk of heart disease, stroke, diabetes, death
Desire to limit/eliminate trans fats of margarine
Viewed as healthier alternative
FACTORS HELPING TO GROW BUTTER SALES
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15
YOGURT
1646
4685
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: USDA NASS
U.S. Yogurt Production (mil lbs)
Long-term Growth in U.S. Yogurt Market With Recent Dip
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Small Decline (-1.2%) in Yogurt Production for 2016
-3.5%
-0.9%
4.1% 4.8%
7.0%
9.0%
15.4%
8.5% 8.0%
13.0%
7.9%
5.3%
2.7%
7.5%8.9%
2.2%3.4%
6.8%
0.8%
-0.3%-1.2%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: USDA NASS
U.S. Yogurt Production (Mil LBS)
% Change vs Previous Year
Yogurt Market Softening in 2015-16
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6.1
14.7
5
7
9
11
13
15
17
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: USDA ERS
Long-term Growth in U.S. Yogurt Market
Per Person Yogurt Consumption (LBS)
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Note: 2016 Per capita numbers released in Sep 2017
0.2 3.5
6.3 7.3
11.4 14.9 15.0 15.8
18.3 18.3 18.7
23.8 23.8
26.2 27.1 28.6 29.5
36.3 38.1
44.0 46.4 47.3 48.4
51.0 57.4
62.7
India
South Africa
Japan
China
Russia
United States
Mexico
Taiwan
Australia
New Zealand
Greece
Norway
Czech Republic
Ireland
Germany
Turkey
Switzerland
France
Denmark
Portugal
Austria
Sweden
Saudi Arabia
Finland
Netherlands
United Arab Emirates
24.2
12.1 9.0
4.0
U.S. Yogurt Market is in its Infancy Relative to Many Other
Countries
Source: Datamonitor Database
Annual Per Capita Consumption (lbs) 2014
Average per
person 2014
yogurt
consumption
was14.9 lbs in
U.S.
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Yogurt’s Strong Health Profile has Built Long-term Growth.
More Recently, Competitive Challenges Emerging
Yogurt overall health properties,
including digestive health
Yogurt drinks, yogurt-based smoothies
Breakfast and snacking occasions
Larger tub sizes/ingredient usage
Innovation – new segments (e.g.,
Australian, Icelandic), new flavors,
new textures
Maturing of Greek segment
Competitive breakfast space including
more portable options
POSITIVE IMPACT ON YOGURT SALES NEGATIVE IMPACT ON YOGURT SALES
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MILK
54,580
49,575
40,000
45,000
50,000
55,000
60,000
65,000
1995 1998 2001 2004 2007 2010 2013 2016
U.S. Fluid Milk Sales Slipping, Larger Drop-off in 2011-14
*Source: USDA ERS 1995-2015; 2016 data reported by USDA AMS
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Fluid Milk Sales (All Channels) (Mil LBS)
Fluid Milk Sales Decline has Moderated Over the Last Two Years
-1.3%-1.6%
-2.2%
-2.9%
-1.4%
-0.7%*
Fluid Milk Sales (All Channels)
% Change vs Year Ago
2011 2012 2013 2014 2015 2016
Milk segments that are growing and off-setting part of milk decline: lactose-free, flavored, refuel and whole.
Milk as an ingredient growing through lattes
Favorable pricing in 2015 and 2016 has also benefitted milk sales.
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* Note USDA 2016
data includes an extra
day for leap year.
When adjusting the
data for the extra
data, milk sales in
2016 are down -1.0%
vs 2015
*Source: USDA ERS 1995-2015; 2016 data reported by USDA AMS
While Fluid Milk Sales have Improved, Sales have not Kept Pace
with Population Growth. Americans are Consuming Less Fluid Milk.
*Source: USDA ERS
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Per Person Fluid Milk Consumption (Gal)
23.8
18.1
0
5
10
15
20
25
30
35
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015
Note: 2016 Per capita numbers released in Sep 2017
While Many Factors are Helping to Pull Up Milk Sales, Currently
the Impact of the Negatives is a Little Stronger
Population growth
Branded & Checkoff marketing efforts
Specialty coffees/lattes & smoothies
Favorable retail prices
Innovation – lactose-free & flavored
Whole milk
Decline in cereal consumption
Beverage competition
Non-dairy milk alternatives
Gallon size
Social responsibility issues
POSITIVE IMPACT ON MILK SALES NEGATIVE IMPACT ON MILK SALES
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Summary
• Total dairy category sales performance was strong in 2015-16
• Dairy benefitted from innovation as well as the trend toward real, fresh and
natural foods
• Cheese and butter were strong contributors to dairy’s growth
• Milk has segments of positive momentum that are off-setting some of the loss
in conventional gallon jugs
• Yogurt production has cooled off after years of strong growth. Greek yogurt
has matured and the breakfast market has picked up many competitors.
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