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Spanish consumers take comfort from milk drinks

29 April 2013

Spanish consumers take comfort from milk drinks

The Spanish economic crisis continued to undermine commercial beverage consumption in 2012 as soaring unemployment and rising VAT continued to weaken consumer purchasing power. With economic conditions not expected to improve in 2013, commercial beverage sales are forecast to register a sixth successive year of decline. Surprisingly, however, there is one category, according to Canadean research, that is expected to buck the trend in 2013; dairy drinks.

Spanish consumers take comfort from milk drinks

Dairy drinks, whilst still the smallest component of the Spanish beverage market, have been growing steadily for the past few years despite the economic situation; albeit at a low rate. Growth has mainly been driven by a shift in consumption from on-premise to off-premise as consumers increasingly opt to prepare meals, drinks and desserts at home in an effort to economize.

In 2012 trends within the dairy drinks market were, however, mixed. Segments carrying premium retail prices, such as cultured dairy drinks and soymilk, suffered a decline as consumers cut back on non-essential purchases. White milk, flavored milk and evaporated/condensed milk however offset the drop in the premium segments thanks to their lower prices. White milk is frequently used as a commodity item by the large modern retailers to encourage consumer footfall. Functional white milk variants also served to draw consumers away from cultured dairy drinks for reasons of affordability. Some innovation around functional variants offering digestive benefits and added fibre was noted, particularly at the end of the year.

Although Candean’s forecast growth for the dairy drinks market is low in 2013, it stands out in a beverage landscape where all other categories are predicted to see further volume contraction. Off-premise sales are again expected to be the main driver as the cocooning trend continues. Private Label will be a key force behind off-premise sales as the low prices and wide range on offer help to attract consumers seeking the best value for money. The increasing presence of Private Label is also expected to help stimulate category sales as producers lower the price of branded products in order to remain competitive and also invest in prize promotions. The performance of the Spanish beverage market in 2012 will be analysed in further detail in Canadean’s Spain Soft Drinks Market Insight report due to be released in June 2013.

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