Flavoured milk has enjoyed steady volume sales in recent years, with 142m litres consumed in 2022 and again in 2023 alongside sustained value growth of 17.3% and 8.7% in 2022 and 2023, respectively*. In retail, flavoured milk is forecast to generate £710m retail sales this year**.
New flavours and formats for these products have fuelled this growth, as has their relative affordability and convenience compared to similar products.
Read our Milkshake Trends 2023 report for insights on market drivers and opportunities together with inspiration for future flavours.
Insights – market drivers and considerations
Cost-of-living – create affordable indulgence
As household spending has been curbed by the cost-of-living crisis, flavoured milk is benefitting from being a cheaper and more convenient alternative to shop-bought drinks like coffee. Brands could seize upon this further by offering indulgent-feeling flavours. As people switch from out-of-home food occasions to at-home or retail products, these sorts of little luxuries allow consumers to trade up even while trading down.
Sustainability – prioritise and promote sustainable practice
With more and more shoppers concerned with how their buying habits impact the environment and climate, brands can align with this by introducing sustainable packaging, using plant-based, recycled or recyclable packaging materials, for flavoured milk drinks. Similarly, they can support consumers to limit food waste too, such as by switching to Best Before, rather than Use By, dates on goods, or advising on how best to store produce to prolong its shelf life.
Growing numbers of milk vending machines have been popping up across the UK to support this too, positioned everywhere from farms to high streets. Offering fresh, fully traceable milk, these allow shoppers to fill reusable bottles and keep ‘food miles’ down while supporting nearby farmers and businesses. Users can top up reusable bottles to take home or use accompanying milkshake syrup dispensers to create flavoured varieties to go.
Health – ensure compliant products
Following the introduction of the HFSS regulations – placing restrictions on produce high in fat, sugar or salt – products like shakes have had to be reformulated so as not to be penalised in how retailers can position, price or promote them.
Many of the category’s leading products were already lower in fat, sugar or salt, though. UK-brand Shaken Udder entirely reformulated its range to ensure compliance with the new regulations, demonstrating adaptability for these products.
Inspiration – market opportunities
Fortification & Functionality – develop functional flavoured milks
Highlighting the benefits of naturally occurring elements of flavoured milk, like protein or calcium, will offer extra appeal to milk drinks. Functional drinks also offer extra value for consumers. Avenmore’s Fibre Plus Milk has added fibre and vitamins while Greenfields range of fortified milk promises to deliver emotional and functional benefits.
Developing these options will appeal to the 49% of people who say flavoured milk being a good source of nutrients would make them drink them more*.
Similarly, refining flavoured milk drinks can also appeal to health-conscious consumers. Lactose-free milks ensure those with intolerance or allergies can still enjoy milk drinks.
Premiumisation – justify price rises with decadent drinks
With all cow’s and plant-based milks seeing price rises in recent months, reformulating or repositioning products to offer a premium feel will help to justify necessary price increases. Premiumisation can come from how a flavoured milk has been produced, how it can be used and enjoyed, or how it is packaged and promoted.
Flavoured milks typical of other cuisines interest 17% of category-buyers, and 39% of flavoured milk-buyers*. Aligning with wider drink trends for bold or international flavours will help here, such as pairing saffron with almond milk for a decadent flavoured milk or ready-to-drink coffee. TukTuk Chai have launched a Masala Iced Milk Tea already, inspired by the popularity of Indian foods and flavours.
Plant-based alternatives
Value sales of plant-based milk have been gradually rising in recent years, with oat milk fuelling this. But while around a third of shoppers now use these products, plant-based alternatives still only hold 10% of the wider market*.
To accelerate sales of products like plant-based milkshakes, brands could offer consumers more usage instructions to enhance and develop usage occasions. This could include how to use products to replace cow’s milk while cooking or baking, or which flavours products like oat or almond milk will pair well with. Arla has added an Oat & Vanilla drink to its Jord range, encouraging consumers to enjoy it in coffees, smoothies, and on cereals.
Aligning with wider drinks trends will also help brands to grow their reach. Oatly’s chilled oat milk, Barista, was developed for foaming ready for coffees, suiting coffee lovers and those keen on indulgent or chilled beverages.
Inspiration – future flavours
A wide range of ingredients and flavours can be used to develop fun-flavoured milk, indulgent milkshakes, or bold-flavoured milk drinks.
Take inspiration from childhood favourites and use familiar retro or candy flavours to create fun flavoured milks. Desserts and treats like Baked Alaska, S’mores, or Jelly & Custard all have flavours perfect for mixing with milk or plant-based milkshakes, for example.
Chupa Chups has launched Strawberry & Cream and Choco & Vanilla flavoured milk in Australia, and Bukidon sells a more unusual melon-flavoured milk in the Philippines.
Trending tropical fruit banana is also ideal for a range of milk drinks, from sweet milkshakes to flavoured ready-to-drink coffees and banana milk teas.
For the boldest flavours, piggyback wider drinks trends for big flavours and sensations. Salted drinks are still trending and could create salted toffee or salted maple milk. Nutty flavours like hazelnut, pistachio or chestnut will all pair well with both cow’s and plant-based milks. Or add smoked or spiced flavours, using torched marshmallow, burnt caramel and butterscotch, or cinnamon, cardamom or nutmeg, respectively.
Over in the US, cake shakes and top-loaded shakes add or combine cake, chocolate, biscuits and even custard to make the most indulgent milkshakes. Pastries like Eclairs, Profiteroles, Brioche or Cronuts can also offer inspiration for decadent flavours.
Shake Shack uses a custard base in its Pistachio shake, blended with vanilla and honey and topped with whipped cream, crisp filo and crushed pistachio.
Make a move on your next cow or plant-based milkshakes
Simpsons are experts in the development of milkshake syrups. Chat to our team for expertise and ideas on how to make the most of these market opportunities.
*Mintel – Dairy & Dairy Alternative Drinks, Milk & Cream report, UK – 2023
Image source: Trendhub The Food People 2023
