Press release - 19 September 2016 00:01

MÜLLER HIGHLIGHTS £700M DAIRY CATEGORY GROWTH POTENTIAL

Müller’s 2020 dairy category vision set to benefit consumers, customers and farmers

Dairy has the potential to be the grocery sector’s engine for growth for the foreseeable future with consumers, customers and farmers all set to benefit, according to Müller.

The liquid milk, dairy ingredients and chilled yogurt & desserts business is preparing to outline plans to unlock an additional £700m of category growth in the sector by 2020.

To help facilitate this opportunity, Müller has confirmed that it is to invest a further £100m over and above normal planned expenditure in its operational, innovation and marketing capabilities over the next 18 months.

Capital projects will include installing new filling lines and further upgrading the capacity and capabilities of existing production facilities at its Müller Yogurt & Desserts and Müller Milk & Ingredients businesses.

The investment will further reinforce Müller’s industry leading capabilities in liquid milk, cream, butter, ingredients, yogurt and chilled desserts.

“The Müller brand is already ahead of Coca-Cola and Cadbury’s Dairy Milk in the top 10 most purchased fast moving consumer goods brands in the UK, picked from supermarket shelves 207 million times each year*,” said Ronald Kers, Müller Group Chief Executive.

“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.”

Chilled Yogurt and Desserts

Bill Mathieson, Commercial Director at Müller Yogurt & Desserts said:

“In the chilled yogurt and potted desserts (CYPD) sector, we will bring new excitement, innovation and game changing product development to our branded and private label business, which is growing strongly.

“Our branded products lead the category witha 21% share of the £2.6bn market with a retail value of£550m despite not currently being available in some very significant segments of the markets in which we operate*. We aim to rectify this, bringing ‘Müllerliciousness’ to the whole branded and private label chilled yogurt and desserts category.

“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.

“We will bring more inspiration and excitement to the point of purchase and create a more enjoyable shopping experience around the dairy category in stores working with our customers to activate big promotional partnerships like our Olympic partnership with Team GB and Team Ireland this summer.

“We will continue to invest in shopper and category insights and are introducing shopper based design capabilities to make buying our yogurts and desserts simple, pleasurable and easy to navigate for consumers.

“We are excited to be at the start of the next phase in the development of the CYPD category and we are looking forward to working closely with our customers to realise this ambition.”

Fresh milk, Cream and Milk Drinks

Better shopper and consumer understanding coupled with new investment in improving the capabilities of Müller’s fresh milk, cream and milk drinks business could unlock category growth of £470 million by 2020.

This potential reinvigoration of a category valued at £3.3bn per annum but in decline by 2% value* year on year would represent a major turnaround, and according to Dan Howell, Commercial Director of Müller Milk & Ingredients (MMI), Müller is impatient to take this challenge on:

“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.

“Milk plays the central role in the dairy category. It’s the core driver of both penetration and frequency, bringing shoppers into the aisle to select the rest of their dairy produce. It’s also of huge importance to the UK diet and is rightly viewed as a beacon of healthy, refreshing, enjoyable nutrition.

“This is a great platform from which we can work with our customers to lift the shopping experience to match the enjoyment of consumption experience.”

Müller has identified exciting trends within the category to drive growth. Milk drinks is bucking the decline at +3.7%* and Müller will add value through innovation, not least utilising the FRijj brand which has the awareness and long standing credibility to reach out to existing and new audiences.

“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 Dan 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.“

Ends…19 September, 2016

Issued by Graeme Jack, Group Communications Director, Unternehmensgruppe Theo Müller Tel +44 1355 598585 or +44 7900 430269

Notes to Editors

Müller’s category vision work will be presented to customers over the next few months. Key insights are as follows:

Müller Yogurt & Desserts

The Chilled Yogurt & Potted Dessert (CYPD) category is worth £2.6bn, bigger than biscuits, crisps and ice-cream. 96.2% of the population buy into the category on average 40 times a year.*
Müller is the number one brand in the CYPD category with about 21% share and is the 8^th most chosen FMCG brand in the UK, with its products picked from supermarket shelves 207 million times during the course of the year.*
With Müller Corner, Müllerlight, Müller Rice and Cadbury chilled potted desserts Müller has theleading Brands in each of the chilled Yogurts and Desserts sectors, holding a 30% Yogurts and 20% Desserts share, almost double the value of our biggest competitors in each of these sectors.*
In the UK we consume less yogurt per capita compared to consumers in Europe, and this is driven by a number of factors including a wider range of pack sizes in Europe, better understanding of the goodness of dairy, and an ever more engaging in-store environment.
Müller Yogurt & Desserts’ new vision identifies a potential £230m of category growth by 2020, to be delivered by bringing excitement, innovation and game changing new product development to branded and private label yogurt and desserts products.
Müller has a track record of growing the category. Over the past 2 years, it introduced 4 of the top 8 new products in the CYPD category (Bliss, Müllerlight Goodies, Müllerlight Fruitopolis and Püd), adding +£60m in category value. *
Müller will further build its leadership in everyday, virtually fat free and Greek-Style sub categories and bring ‘Müllerliciousness’ to key and growing parts of the category where it doesn’t currently have a presence.
Müller will redefine and further energise its branded luxury yogurt and desserts offering
Müller will ensure that its products for kids capitalise on macro health trends, in particular sugar reduction and leveraging ‘dairy goodness’

Müller Milk & Ingredients

Müller’s first ever liquid dairy category vision identifies six key growth drivers that collectively aim to increase overall consumption of liquid dairy and drive penetration in higher value segments such as milk drinks, drive excitement and interest in milk and year round shopper use of cream.

Each of these categories clearly has an individual role to play but are also united by the common themes and levers such as nutrition and enjoyment and the opportunity to engage more effectively in the store.

Specific activity is under wraps at the moment, but common themes underpin Muller’s growth plans:

Sell it to Me – Müller will deliver instore leadership reflecting shoppers’ needs for accessibility, availability and enjoyable shopping experience.
Mission Possible – The UK has undergone significant change in grocery shopping & consumption behavior and the retail landscape continues to evolve at pace. Müller will place the right products in the right place at the right time reflecting how, when and where people shop
Health 2.0 – In milk we have a product which incorporates important nutritional building blocks. Müller will communicate and further educate the UK population on dairy goodness in great tasting products
Life 2.0 –Müller will capitalise on changes in population and household diversity to deliver relevant life stage targeted products and innovation. Where dairy is concerned one size does not always fit all.
Value Every Drop –. Categories of this scale and importance demand clearer product hierarchy and tangible sophistication if we are to fuel aspiration for a fuller, higher value range of products in our shoppers baskets & fridges. Müller will drive positive promotion and education to engage and encourage re-appraisal of liquid dairy
Globe in a Glass – Müller will drive excitement, engagement and trial through flavour innovation and epicurean new product development. The universal affection for milk gives us the opportunity to learn and adapt the best of the rest of the world for our consumers in the UK

*Sources for claims