Drinking yoghurt sector slows

By Sarah Hills

- Last updated on GMT

Related tags: Cent, Drink, Western europe

Sales of drinking yoghurt are showing signs of a struggle as growth slowed down in Europe at the end of last year, according to a new market report.

Out of the 29 packaged food categories tracked by US-based research firm Sanford C. Bernstein, it said 22 saw positive sales growth.

However, the slowest growing category was drinking yoghurt, which was down nine per cent, followed by gum which dropped seven per cent, according to the report called “European Food: Sales growth and share gains”​ for December 2008.

The figures add weight to analysts’ predictions that despite rapid growth in sales volumes and value over recent years, manufacturers of yoghurt drinks are set to face some difficulties.

Meanwhile the strongest category was sauces which increased 12.9 per cent, followed by margarine which was up 10.5 per cent and salty snacks increased 7.5 per cent.

The monthly report from Bernstein covers France, Germany, Italy, Spain and UK – the top five markets in Europe which make up an estimated 70-75 per cent of all European sales.

The figures are based on sales growth and share trends in the region for the top categories of four major companies - Cadbury, Danone, Nestlé and Unilever – covering four weeks up to January 4th.

The report said that Danone, a major player in the drinking yoghurt category, “saw a marked deterioration in growth in the period to -2.1 per cent from 3.9 per cent in the last period”.

Growth was particularly weak in bottled water (-9.8 per cent) and drinking yoghurt (-8 per cent).

But the report said Danone’s this was attributable to weak growth in its categories as the company actually gained market share in drinking yoghurt, yoghurt and baby formula.

Market view

In 2008, 310 new drinking yoghurt or liquid culture milk-based beverage products were launched in Europe, according to figures from analyst Mintel in November.

It said that in the UK for example, sales surged between 2002 and 2005 when yoghurt drink value climbed by £183m to £268m, but the retail value was estimated to have fallen to £245m in 2007.

Mintel added that 90 per cent of yoghurt drinks in the UK fell under the active health banner, which is confusing for consumers and a major factor setting back further development. However, it said there was still strong potential.

Confectionery and sauces

The Bernstein report said confectionery was mixed with good growth in chocolate (up 4.9 per cent), but negative growth in sugar (-0.3 per cent) and gum (-7 per cent).

Cadbury’s performance echoed this with positive chocolate growing 2.6 per cent) and sugar confectionery up one per cent, but gum was down 6.2 per cent.

Meanwhile Nestlé’s growth decelerated to -1.8 per cent, while the strongest growth came from sauces, which was up 7.2 per cent.

Unilever’s growth was “flat”​ but growth was strong in bouillon (up12.3 per cent) and mayonnaise (up 11.4 per cent).

Overall it said that packaged food in Western Europe was growing by about two to four per cent.

However, there was a mild deceleration to 2.4 per cent from 3.1 per cent previously.

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