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Fluid Milk Loses More Sales in 2022!

Fluid milk sales through 2022 are now available. By comparison, the changes posted for 2021 are available here. The decline in fluid milk sales in 2022 was 2.4 percent by volume. The five-year average is about two percent annually.


The 2022 decline for whole milk and two percent fat milk was only one percent. The decreases in one percent fat milk and free fat free milk were eight percent in 2022. Clearly, the two smallest categories of milk are taking a major hit.

Chart I below shows a breakdown by type of milk. Whole milk and two percent fat milk now make up 82 percent of the total fluid milk sales. In 2017, one percent milk made up 14 percent of the total fluid milk sales, and in 2022 it is only 12 percent. Fat free milk has dropped from nine percent to just six percent. There is a reason for this huge difference, and it will be covered later in this post.

Chart II shows the change in pounds of milk purchased and Chart III shows the percent change in fluid milk purchases. When "stay at home" mandates were enacted in 2020, sales of fluid milk improved significantly, and briefly reached the prior year levels. The sales quickly fell down in the second half of 2021. Currently, sales measured in pounds are at declines similar to 2018 and 2019, around 80 million pounds per month. The percentage decline (Chart III) reflects greater losses than in 2018 and 2019 and that percentage decline will continue to grow if the volume of pounds declining stays the same.


WHICH MILK PRODUCTS ARE DECLINING FASTEST?

The most used types of milk, whole and two percent fat milk are decreasing at about one percent annually (Chart IV). Whole milk and two percent fat milk are similar in volume. Currently two percent milk is slightly bigger, perhaps due to concerns about saturated fats as covered in the prior post.

Sales of one percent fat milk and fat free milk are dropping at eight percent annually. Fat free milk has dropped by 44 percent in the last five years. As mentioned in a previous blog post where plant-based "milk" was analyzed, one percent fat and fat free milk may be cannibalized by plant-based products which also have almost no fat and a better taste.

HOW IS ORGANIC MILK DOING?

Organic milk, despite significantly higher prices is holding its own while conventional milk is declining steadily (Chart VI). In 2022, organic milk sales made up six percent of total milk sales. Over five years, organic milk has grown by 10 percent while conventional milk has dropped by 10 percent. When COVID "stay at home" policies were executed, organic milk grew by 12 percent while conventional milk fell by .7 percent. Organic milk is following the healthy eating trends of emphasizing natural and organic products.

WHAT IS DRIVING THE DECLINE IN LOWER FAT PRODUCTS?


Although no surveys are publicly available to substantiate it, the increase in plant-based milk may be contributing to the losses in low fat and fat free milk products.


The FDA has recently released a draft on "Labeling of Plant-Based Milk." Yes, even in the title of this document, the word milk is used to describe plant-based products. The proposal is suggesting labeling standards that are confusing. As an example, the document suggests labeling "Cashew Milk" with the statement "Contains lower amount of potassium than milk." If the customer is buying a container labeled as cashew milk, and he is also being told that the product is deficient in potassium compared to milk, that is really confusing.


The document contains statements like "one customer study suggested that about three-quarters of its respondents understood that plant-based milk alternatives do not contain milk." What about the other 25% of respondents? What about the other surveys?


Sunday, March 5, 2023

John Geuss


milkprice.blogspot.com


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