The document provides insights into the Spanish milk market and recommendations for milk manufacturers. It analyzes market dynamics, drivers, clusters, and manufacturer, channel, and product performance. Key findings include that the overall market is stable, but demand is shifting to healthier options. It identifies underperforming stores and opportunities for different manufacturers. Recommendations center around distribution innovation like subscription models and dash buttons for delivery, as well as product innovation focusing on protein and interactive packaging.

1. How can you sell
more Milk?
Using Data to Discover Trends and
Opportunities in the Spanish Market
July 2018

2. MBD O1 Group C
Our Purpose
2
Milk manufacturers with multiple brands, we are here to share with you the main insights about the
Spanish Milk Market and some recommendations based on your performance these past 1.5 Yrs.
Channel Location Time Period Forecast
Product Manufacturer
WHERE
WHAT
WHEN
HOW
Promotions Innovation

3. The Market
Dynamics and Driver

4. MBD O1 Group C
I. Market Dynamics
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1.1 Market Stability
● In April 1st
2015 the cow milk industry is liberalized by
the EU and the market grew 3.1% Y/Y
● Commodity Product: the trend line for units and value is
stable through time, although the demand for certain
types of milk has grown more than for others.
● Ups and Downs might happen because of the weather,
and the travels for the Easter break.

5. MBD O1 Group C
I. Market Dynamics
5
1.2 Manufacturer Dominance
● In this Market, we have four key manufacturers (or
vendors) and then all the “others” trying to catch up.
1.3 More Brands, More Shelf Space
● Although the volume of milk is stable, we can see
how the brand mix in stores can be dynamic.

6. MBD O1 Group C
II. Market Drivers
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2.1 Demand for Healthy Options
● Product Mix is changing, other segments on the rise
● The rise of documentaries and TV shows showcasing
that, it’s influencing the sales of milk products.
● 7.8% of the Spanish population base their diet on a
plant-based diet.
● In countries like the USA, Italy or the UK the total
population that has a plant-based diet is between 10%
and 13%.
● More that 55% of the population surveyed is willing to
pay up to 10% more for healthier versions of a product

7. MBD O1 Group C
II. Market Drivers
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2.2 Growth of Online Channels 2.3 Need for Marketing Innovation
● Milk is mainly sold in Super and Hypermarkets
● Online Grocery Presence will have a real
positive influence in brand perception
● Because of the nature of the product, 62% of the
times, only a basic discount is applied to the products
● Another 25% of the time, they feature it in the store

8. MBD O1 Group C
III.Market Clusters
8
3.1 Current Store Segmentation
Hypermarkets
● Large sales surface
● High sales revenue and units
● Large assortments
Supermarkets
● Small sales surface
● Low sales revenue and units
● Small assortments
However, we detected anomalies in the data that did not follow the standard classification
Hypermarket Supermarkets
● Large sales surface
● Low sales revenue and units
● Small assortments

9. MBD O1 Group C
III.Market Clusters
9
3.2 Improved Store Segmentation
We came up with a new segmentation of stores by using
revenue along with channels to come up with 3 clusters:
Supermarket Stores (Red): This is the cluster that we have
retained from the original segmentation.
High Value HyperMarkets (Green): These stores are the
ones that have very high revenue (>400K Euros) and are in
hypermarkets
Low Value HyperMarkets (Blue): These stores are
hypermarkets but have sales comparable to supermarkets.
The Low Value Stores are underperforming as they have low
sales but a high square foot area

10. Decision-Making Tool
BI Dashboard Demo

12. MBD O1 Group C
Key Insights I
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Sales Forecast
a. Overall, it seems like the Milk Market will be stable six month ahead at around 1.9 million units per week
b. For Supermarkets, the unit sales are predicted to increase slightly as well, compared to hypermarkets
c. When we look at the digestive segment though, it is forecasted to slightly increase over the next 6 months
d. While the classic segment is forecasted to have a drop in sales and stabilize at a lower number of units

15. MBD O1 Group C
Key Insights II
15
Market Performance
a. The proportion of unit sales per milk segment seems stable with Classic Milk as the leader over time.
b. But when we filter and look at sales by community and how the different product segments perform, in Kids Milk
under 3 years old, Andalucia has higher sales than Madrid.
c. Even though Cataluña and Andalucia have more stores and there is a higher population than Madrid, they
consume less milk in units from our manufacturers.
d. When we look at each package type the promotion mix changes.For example, they put milk in a bag in the shelf
header of the stores while they tend to feature the bottle milk. At the same time, milk in a glass bottle is basically
only being discounted over the rate price.

17. MBD O1 Group C
Key Insights III
17
Manufacturer Performance
a. There are two main players in terms of Manufacturers (1 and 2), one big follower (3) and another one that is
catching up to them (4).
b. They all follow the same seasonal trend, yet they have dominance in different spanish communties, for example,
manufacturer 4 has a significantly higher avg. of units and value sold in Pais Vasco compared to the other
manufacturers and communities. Yet, the number of stores is relatively the same than others.
c. More than 50% of Man.4 product mix is Digestive Milk, and apparently there is a huge demand in Pais Vasco for
it, which might explain why they are selling most in this region compared to other manufacturers. This is serving
as their competitive advantage against the big 3 players.
d. Also, manufacturer one, the market leader, seems to have a higher avg. value per unit, while in terms of average
unit sales it is similar to others. This is probably due to the fact that manufacturer 1 was mainly selling classic
milk but now tapping into the digestive milk segment. Digestive milk has a higher value per unit and their sales in
that segment have been increasing over the past weeks.

19. MBD O1 Group C
Key Insights IV
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Channel Performance
a. If we take the normal segmentation between hypermarket and supermarket, it seems like supermarkets have a
higher value per unit in comparison to supermarkets. This higher value can be related to the promotion mix
because they use discount over rate price as their main strategy while hypermarkets balance the discounts with
featuring the product in the store.
b. But when we look at our cluster #3, the underperforming hypermarkets, although the average value per unit is
similar to that of other clusters, the average number of units sold is significantly lower.
c. Geographically, we can also see how stores in cluster #1, high value hypermarkets, have a higher presence in
the north of Spain while stores in cluster #3, the underperforming markets, have a higher presence in the south.
d. We can also see how the product brand mix is more stable in hypermarkets compared to supermarkets. For
example, brand 1 of smaller other manufacturers, has a much higher dominance in the supermarket brand mix
compared to its dominance in hypermarkets.

20. Recommendations
Distribution and Products

21. MBD O1 Group C
I. Distribution Innovation
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1.1 Dash Button
● As Milk is a commodity, we suggest milk
manufacturers to partner with Amazon to
create a dash button for households to get
their milk delivered within a few hours.
● We propose manufacturers to create a subscription
model where every 3 weeks households get milk
delivered and the complementary goods that they
usually purchase. This model already exists in the US!
1.2 Subscription Model

22. MBD O1 Group C
II.Product Innovation
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2.1 Interactive Packaging
● Use your products to build brand
awareness, increase transparency of
production, share recipes and promote
healthy habits to customers.
● To overcome certain health misconceptions, focus on the
ingredient that most people feel its valuable: Protein.
Target the more “athletic” customer segment with
protein-focused products or even develop new brands.
2.2 Focus on Protein Benefits

23. Thank You
MBDO1 Group C:
Anchal Jaiswal, Anniel Pi, Cedric Viret, Melody Ucros, Miguel Romero, Pablo Dosal, Victor Kausch