Report calls for increased investment in organic milk

Dairy cow

Organic milk is driving value and boosting the milk category. That’s the findings of the OMSCo Organic Milk Market Report, which says that organic can be a sales driver amidst supermarket price wars and a challenging retail environment.

Whilst top-line value and volume growth were ahead of the standard milk sector and the overall milk category, the report finds this masked an even more positive underlying performance for organic milk. It claims that over the past year, organic milk was the only sector of the six sectors in the milk category to record an increase in base sales per point of distribution – or per average sized store – but despite this, retail distribution was cut by 2.9%.  Therefore, retailers have an easy opportunity to add value back into their overall categories by facilitating and leveraging the natural underlying growth in organic sales.

The sector experienced 6.4% value growth compared to a decline of 1.6% in the standard cow’s milk sector and a decline of 1.4% for the overall milk category. This growth equated to a £9m injection into overall category revenue, helping to offset an over £40m loss in the standard cow’s milk sector. Only the dairy alternatives sector contributed more than organic (£12.2m), which in contrast was facilitated by an increase in retail distribution new product launches and significant branded investment.

One in five non-buyers of organic milk who were surveyed for the report said that the product was not easy to find in convenience stores, with the same proportion stating that the product was often unavailable.

What’s more, according to the report, stocking just one SKU of organic milk is not enough to help drive sales. 43% of organic milk users said claimed that they would trade-down to lower cost conventional milk, if their preferred fat type – skimmed, semi-skimmed, whole milk – was not available.

In particular, organic skimmed milk sales significantly under-index vs standard skimmed milk sales (index of 61).  Often skimmed milk is the variant that is not carried by retailers but given the fact that organic milk sales over-index with older consumers due its perceived health benefits, as does skimmed milk – this should be an obvious match.