Consumers turn to dairy in Covid crisis as retail sales boom

Speaking during the Dairy-Tech Online Dairy Market Overview session on Tuesday (16th February), Jonathan Dixon from Arla Foods, explained how more people working from home had resulted in a rise in dairy sales.

“Consumers have turned to dairy in times of crisis,” he said. “The grocery market is booming with a huge upturn and a total food growth of 10%. On the flip side, the food service sector has seen a downturn with the tough lockdowns.”

He said dairy has increased because of consumers looking after themselves more during lockdown and spending increasing time at home.

“Cheese consumption has risen by 15.7% with more people eating cheese at lunch. Yoghurt sales have risen by 4.1% and butter by 16.1%, particularly block butter sales, due to more people home baking.”

Rob Hutchinson, operations director for Muller, said they had seen strong retail sales during the pandemic. “Cereal consumption is up 8%, which is good for milk sales. The challenge now is to maintain the level of consumption as we come out of lockdown,” he said.

The panellists, which also included journalist and commentator Chris Walkland and chair John Allen from Kite Consulting, said they were optimistic about the UK dairy industry.

Mr Hutchinson said: “I’m cautiously optimistic about the market outlook. The markets recovered after March last year and the global stock position is lower than we expected coming into this year, which is a good position to be in.”

The exception is cream, which is seeing a big mismatch in the price compared to the EU. This is largely because of Brexit and the extra export health certificates that are now required when exporting fresh products, like cream. Mr Hutchinson added: “We hope to see the situation improve as there’s no doubt this is having an impact on the cream price,” he said.

Mr Walkland said the outlook was good to firm for most commodities. “Cheddar is firm, mozzarella is firming, butter is good, and powders are okay, but cream is struggling. There are reasons to be optimistic on price, but sober on margins,” he added.