Dairy shakes up the food service market

Dairy has proved itself the cream of the crop in the food service sector, with sales of milk-based cuisine up 12% last year.

According to new research, the total food service market struggled in 2018, as cash-strapped consumers looked to cut back on dining out-of-home. But dairy’s inclusion in popular dishes such as pizza and cheeseburgers helped lift its performance.

Spend on dairy dishes rose to £16 billion after featuring in just over half of all eating-out meals.

In food service, 43% of dairy servings are within a ‘host meal’, which means they are part of the cooking or serving process – with the top four dishes; cheeseburgers, sandwiches, baguettes and pizzas, representing 30% combined.

Cheeseburgers alone clocked up 800 million servings in 2018, making them the single biggest dairy item in food service.

AHDB Analyst Zoe Avison said: “Uncovering dairy’s role in food service is not straight-forward and as a result of this we have, in the past, focused more on the retail sector.

“However, by working with NPD Crest, who collect panel data on food and drink occasions, we have been able to estimate the size of the market based on what was purchased last year. This gives us another piece of insight that we can offer to the dairy sector.

“We saw that in 2018, 1.3 billion hot drinks with milk were sold – which is up 6.3% on the previous year. Dairy has a strong association with casual, value-for-money occasions, which is a key advantage in a difficult market.”

According to the data, 2018 was also a strong year for dairy desserts with servings of ice cream and cheesecake rising 1.5% and 13.7% respectively.

This growing demand has led to a rise in the number of dessert parlours opening across the country – with 86 new sites forecast to open this year alone, according to MCA Insight.

Zoe added: “These establishments provide an alternative location for younger, more tee-total audiences to socialise. With late opening hours and extravagant, highly ‘instagrammable’ desserts, these venues offer great appeal to this generation of foodies.

“We have seen that there are plenty of opportunities for the dairy industry within the food service sector. For example, dinners are strongly associated with treating, celebrating and socialising, therefore indulgent experiences and sharing dishes could help boost dairy’s performance at these occasions.”