Growth opportunities in the dairy sector

The cost-of-living crisis in the UK is having a significant impact on how consumers are choosing to spend their money. During 20‑31 July 2022, 89 percent of British adults said expenses had increased, with 94 percent naming groceries as a reason,¹ indicating plans to adopt more frugal approaches where possible.

The food and drink sector can take some comfort in the fact that people are initially cutting non-essential spend, eg, reducing fuel usage and holidays, but it is still concerning to hear that more than one-third (35 percent) already find it necessary to spend less on food and other essentials.²

Despite consumers looking to reduce grocery bills – which will naturally affect all purchases – there are still opportunities across the food and drink sector, including for dairy suppliers. In fact, research shows there are significant opportunities for the sector throughout the global market.

The dairy superfecta

Dairy caters to four major consumer requirements: fat, protein, provenance and safety. Although their prominence varies across regions, there is often overlap. Connecting multiple trends simultaneously can help improve the chances of successful growth within a particular market.

Consumers are paying more attention to the fat content and provenance of their dairy products

While consumers have previously avoided saturated fats, experts have recently exonerated dairy fat. This, combined with new research about the negative impact of sugars on our overall health, has caused some consumers to look for more high-fat/low-sugar products. The idea that dairy fats aren’t as unhealthy as once believed has also given rise to the notion of ‘permissible indulgence’. Wording such as ‘rich’, ‘creamy’ and ‘indulgent’ appeal to consumers who want something that feels like a treat without having a negative impact on health.

Protein is widely understood to be critical to overall health and weight management – especially to consumers interested in increasing their muscle mass. There has been significant growth in this area; from 2016 to 2020 the number of global product launches with messages centred around protein increased by 9.45 percent.³