German dairy Müller is increasing its investment in the UK by an additional GBP100m (US$130.3m) over the next 18 months in a bid to grow the category in the country.
Delivering a “dairy category vision” for 2020, Müller said it intends to unlock an “additional GBP700m” of dairy category growth in the UK over the next four years.
Müller is ramping up its capital expenditure in its operational, innovation and marketing capabilities. Capital projects will include installing filling lines and further upgrading the existing production facilities at its combined yogurt and desserts division and at its milk and ingredients business.
“The Müller brand is already ahead of Coca-Cola and Cadbury‘s Dairy Milk in the top ten most purchased fast-moving consumer goods brands in the UK, picked from supermarket shelves 207 million times each year,” Müller chief executive Ronald Kers said. “Now we want to use our leadership position in dairy to rev up the engine and work collaboratively with our customers and of course our farmers to delight consumers and realise the untapped potential that exists to grow this amazing category.”
In chilled yogurt and potted desserts, Müller plans to drive growth of its branded and private label business through innovation and “game changing product development”, Bill Mathieson, the commercial director for Müller’s yogurt and desserts business, said. “We see opportunities across the category from health to indulgence, and making CYPD available more often in relevant formats across the day. There is significant potential to introduce new and innovative formats and to increase the number of shopping points in stores where shoppers can buy our products to consume at home or on the go.”
In fresh milk, cream and milk drinks, Müller said better shopper and consumer understanding coupled with new investment in improving the capabilities of Müller’s milk business could unlock category growth of GBP470m by 2020, the company said. The category is worth GBP3.3bn a year but sales are in decline – down 2% year-on-year. Dan Howell, commercial director of Müller’s milk and ingredients arm, believes the company can help reverse the decline.
“By working closely with our customers to deliver products which tap into the aspirations of our consumers, we can increase the size of this category in 2020 by up to 14% compared to its current value. We are very excited by the strategic customer partnerships we are developing which will lead to long-term growth and value creation.
Müller said it plans to “add value” through innovation, and highlighted the potential of its Frijj milkshake brand. “Over the next few months we will be revealing full category visions for each of the liquid dairy categories; fresh milk, cream, and milk drinks,” said Howell. “We have the ambition, knowledge and capability to lead the way with insight and investment in both branded and private label innovation to help our retail partners delight their shoppers and unlock long-term growth which benefits everyone in the supply chain.”