Morrisons has announced they are to sell a new milk brand called “Milk for Farmers” that will see 10p per litre extra paid directly to farmers. The move comes amidst a series of debates in the industry over declining milk prices. Mintel’s Senior Food and Drink Analyst, Richard Ford, takes a look at what the move means for the UK market…
Morrisons’ new Milk for Farmers fresh milk brand is an inspired move to satisfy its shareholders, customers and farmers all in one go.
In launching the brand, Morrisons is asking consumers to demonstrate their support for farmers whilst also protecting its own financial interests: continuing to sell standard price fresh milk means customers will still have a choice in the level of price they pay – putting the price of all milk up might have alienated some customers.
The launch echoes northern upmarket retailer Booths’ decision to rename its own-label milk Fair Milk in 2014, guaranteeing to pay its farmers the leading market price.
The launch of Milk for Farmers looks well-placed to chime with consumers, in light of Mintel’s previous research findings:
- 80% of British consumers agreed that more profit from the sale of milk should go directly to the farmer [Source: Dairy Drinks Milk and Cream UK 2014].
- 35% of consumers said they were not convinced that supermarkets were doing enough to support British dairy farmers [Source: Dairy Drinks Milk and Cream UK 2014].
- Half (51%) of milk drinkers said they would pay more than £1 for a four-pint bottle of milk [Source: Added Value in Dairy Drinks Milk and Cream UK 2015].
The latter is in stark contrast to the current situation, with the large grocery retailers charging between 89p and £1 for four pints of standard white milk.
The launch of Milk for Farmers follows weeks of protests by British dairy farmers who claim the price they are paid for milk is unsustainably low. Current low farmgate milk prices are the result of a glut in the supply of milk around the globe, causing the price of various dairy commodities to fall.
Separately, recent years have seen the shelf price of fresh milk in the UK eroded as the large grocery retailers have engaged in a price war. Farmers argue that this has reduced the value of milk in consumers’ eyes, placing further pressure on the industry.
Recent farmer PR stunts have included trolley dashes in which farmers have cleared supermarket shelves of milk, and cows being taken into supermarkets.
Milk for Farmers follows the launch in 2012 by Hovis of its British Farmers bread loaf. The difference being that Hovis sought to support British farmers by using 100% British-grown wheat in the bread, whereas Morrisons is making its support even more tangible by pledging to pay farmers 10p per litre of the milk sold.
The media attention British dairy farmers have attracted, coupled with the positive consumer sentiment towards their plight, suggests initiatives such as Morrisons’ Milk for Farmers could help set individual retailers apart.
Richard Ford is Senior Food and Drink Analyst at Mintel. He joined the Mintel UK food and drink team from The Grocer where he worked for six years, covering meat, fish, poultry, fruit, veg, eggs and seafood, writing news, analysis and features. Prior to entering journalism, he practised as a Solicitor at a City law firm, specialising in commercial risk and property insurance. At The Grocer, Richard helped to develop the ‘How to Build a Brand’ one day conference, to relaunch The World’s 50 Best Grocers special feature and to produce the magazine’s annual Dairymen supplement.
